Save Twice with the Saver’s Credit

If you are a low-to-moderate income worker, you can take steps now to save two ways for the same amount. With the saver’s credit you can save for your retirement and save on your taxes with a special tax credit. Here are six tips you should know about this credit:

1. Save for retirement. The formal name of the saver’s credit is the retirement savings contributions credit. You may be able to claim this tax credit in addition to any other tax savings that also apply. The saver’s credit helps offset part of the first $2,000 you voluntarily save for your retirement. This includes amounts you contribute to IRAs, 401(k) plans and similar workplace plans.

2. Save on taxes. The saver’s credit can increase your refund or reduce the tax you owe. The maximum credit is $1,000, or $2,000 for married couples. The credit you receive is often much less, due in part because of the deductions and other credits you may claim.

3. Income limits. Income limits vary based on your filing status. You may be able to claim the saver’s credit if you’re a:

• Married couple filing jointly with income up to $60,000 in 2014 or $61,000 in 2015.

• Head of Household with income up to $45,000 in 2014 or $45,750 in 2015.

• Married person filing separately or single with income up to $30,000 in 2014 or $30,500 in 2015.

4. When to contribute. If you’re eligible you still have time to contribute and get the saver’s credit on your 2014 tax return. You have until April 15, 2015, to set up a new IRA or add money to an existing IRA for 2014. You must make an elective deferral (contribution) by the end of the year to a 401(k) plan or similar workplace program.

If you can’t set aside money for this year you may want to schedule your 2015 contributions soon so your employer can begin withholding them in January.

5. Special rules apply. Other special rules that apply to the credit include:

• You must be at least 18 years of age.

• You can’t have been a full-time student in 2014.

• Another person can’t claim you as a dependent on their tax return.

6. You figure your credit amount based on your filing status, adjusted gross income, tax liability and the amount of your qualified contribution. Other rules also apply. For more information on this or other tax questions, contact Ron Wilburn, CPA at (918) 212-9950.

A Guide to Financial Decisions: Implementing an End-of-Life Plan

Financial Decisions Guide

Link to original content on AICPA website – Please use link below to access a guide with our contact information added.

Life can change quite suddenly and unexpectedly.  Decision-making during these stressful and vulnerable times can be difficult and many times the decisions required can have far–reaching impact.   The key is knowing the issues and having a plan in place before the unexpected happens.   This guide helps consumers understand the issues as they prepare to work with their advisors.

Who should read this Guide?
If  you fall into one of the following groups, you will particularly benefit from this guide:

  • Part of the sandwich generation – juggling both older parents and children
  • Pursuing an active retirement lifestyle
  • Have a young family and are concerned about planning for the unexpected
  • Have special needs situations

A Guide to Financial Decisions – Implementing an End of Life Plan

Whether you are currently dealing with the loss of a loved one, or making decisions about an aging parent, or simply want to proactively be ready for the future, this guide will help identify many of the issues, decisions and programs of which you should be aware.

This guide pulls together a wide spectrum of information in a well-organized, easy to read format.   We encourage you to use this information along with the appropriate advisors as you make current decisions or prepare for the future.

For more information on other financial topics, visit the 360 Degrees of Financial Literacy Web site.