If you are somebody who lives from paycheque to paycheque, then it’s really hard to save for retirement. The US Government with the never ending urge to help the society is trying to make it a little easier for you to make retirement savings.
Retirement savings made easier:
The retirement savings contributions’ credit is not given much attention most of the times. The credit, the objective of which is to provide the low earning workers to make voluntary contributions to their 401(k) or IRA plans. This has been indicated by the Internal Revenue Service.
This credit will be given in addition to the income on tax returns’ reduction for all the contributions to the retirement plans.
Just like the deductions or the tax credits, the credit phases as the incomes become higher in amounts. The credit phases out at around 30 thousand dollars for all the single taxpayers and for married couples (that file jointly) it amounts to around 61 thousand dollars. It’s just over 45 thousand dollars for the head of the households. It’s worth mentioning that the person needs to be at least 18. In order to claim the credit you would have to fill the form 8880.
The treasury department insists that the contributions can be made through a bank account, via an employer or by navigating all or some of their tax refund to the myRA account.
