While it is the end of the year, the opportunity for this tax credit is still readily available, and will continue to be for a few months
(PRWEB) December 30, 2011
Low and moderate income workers can take steps now to save for retirement and earn a special tax credit in 2011 and the years ahead, according to the Internal Revenue Service. The IRS wants to encourage Americans to contribute to their retirement funds, and what better way than to offer a tax credit? They released news stating “The saver’s credit helps offset part of the first $2,000 workers voluntarily contribute to IRAs and to 401(k) plans and similar workplace retirement programs. Also known as the retirement savings contributions credit, the saver’s credit is available in addition to any other tax savings that apply.”
While it is the end of the year, the opportunity for this tax credit is still readily available, and will continue to be for a few months. In an IRS newsletter they state “Eligible workers still have time to make qualifying retirement contributions and get the saver’s credit on their 2011 tax return. People have until April 17, 2012, to set up a new individual retirement arrangement or add money to an existing IRA and still get credit for 2011. However, elective deferrals must be made by the end of the year to a 401(k) plan or similar workplace program, such as a 403(b) plan for employees of public schools and certain tax-exempt organizations, a governmental 457 plan for state or local government employees, and the Thrift Savings Plan for federal employees. Employees who are unable to set aside money for this year may want to schedule their 2012 contributions soon so their employer can begin withholding them in January. The saver’s credit can be claimed by: Married couples filing jointly with incomes up to $56,500 in 2011 or $57,500 in 2012; Heads of Household with incomes up to $42,375 in 2011 or $43,125 in 2012; and Married individuals filing separately and singles with incomes up to $28,250 in 2011 or $28,750 in 2012.”
So in conclusion, put those spare dollars toward retirement and reap in the rare benefits the IRS offers. Those still struggling to stay afloat due to back tax debts are encouraged to seek tax professionals to assist, so these benefits can be available in the future.
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