THE BEST!!! IRS Savers Tax Credit for Low-Middle Income Earners

[Outdoorsygal]

Unbelievable!!! It's easier to read this w/graphs when you click the IRS link below



Retirement Savings Contributions Credit (Saver’s Credit)

You may be able to take a tax credit for making eligible contributions to your IRA or employer-sponsored retirement plan.
Who's eligible for the credit?

You're eligible for the credit if you're:

1. Age 18 or older;
2. Not a full-time student; and
3. Not claimed as a dependent on another person’s return.

See the instructions for Form 8880, Credit for Qualified Retirement Savings Contributions, for the definition of a full-time student.
Amount of the credit

The amount of the credit is 50%, 20% or 10% of your retirement plan or IRA contributions up to $2,000 ($4,000 if married filing jointly), depending on your adjusted gross income (reported on your Form 1040 or 1040A). Use the chart below to calculate your credit.
*Single, married filing separately, or qualifying widow(er)
2017 Saver's Credit Credit Rate Married Filing Jointly Head of Household All Other Filers* 50% of your contribution AGI not more than $37,000 AGI not more than $27,750 AGI not more than $18,500 20% of your contribution $37,001 - $40,000 $27,751 - $30,000 $18,501 - $20,000 10% of your contribution $40,001 - $62,000 $30,001 - $46,500 $20,001 - $31,000 0% of your contribution more than $62,000 more than $46,500 more than $31,000
2016 Saver's Credit Credit Rate Married Filing Jointly Head of Household All Other Filers* 50% of your contribution AGI not more than $37,000 AGI not more than $27,750 AGI not more than $18,500 20% of your contribution $37,001 - $40,000 $27,751 - $30,000 $18,501 - $20,000 10% of your contribution $40,001 - $61,500 $30,001 - $46,125 $20,001 - $30,750 0% of your contribution more than $61,500 more than $46,125 more than $30,750
2015 Saver's Credit Credit Rate Married Filing Jointly Head of Household All Other Filers* 50% of your contribution AGI not more than $36,500 AGI not more than $27,375 AGI not more than $18,250 20% of your contribution $36,501 - $39,500 $27,376 - $29,625 $18,251 - $19,750 10% of your contribution $39,501 - $61,000 $29,626 - $45,750 $19,751 - $30,500 0% of your contribution more than $61,000 more than $45,750 more than $30,500 Retirement savings eligible for the credit

The Saver’s Credit can be taken for your contributions to a traditional or Roth IRA; your 401(k), SIMPLE IRA, SARSEP, 403(b), 501(c)(18) or governmental 457(b) plan; and your voluntary after-tax employee contributions to your qualified retirement and 403(b) plans.
Rollover contributions (money that you moved from another retirement plan or IRA) aren’t eligible for the Saver’s Credit. Also, your eligible contributions may be reduced by any recent distributions you received from a retirement plan or IRA.
Example: Jill, who works at a retail store, is married and earned $37,000 in 2016. Jill’s husband was unemployed in 2016 and didn’t have any earnings. Jill contributed $1,000 to her IRA in 2016. After deducting her IRA contribution, the adjusted gross income shown on her joint return is $36,000. Jill may claim a 50% credit, $500, for her $1,000 IRA contribution.





https://www.irs.gov/retirement-plans...-savers-credit

[Outdoorsygal]

Save Twice with the Saver's Credit

IRS Special Edition Tax Tip 2014-22, November 7, 2014
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

https://www.irs.gov/uac/save-twice-with-the-savers-credit

[Outdoorsygal]

This is more confusing than I thought so here is a WIKI article

https://www.bogleheads.org/wiki/Saver's_credit

Edited to add- I found an AGI calculator if anyone wants to use it.

http://money.cnn.com/tmp/networth2.html

We'll only get credit for 10% towards the $4000 I contribute. We are very low income so this shocks me but it goes by agi. But still, we come out ahead

With my guesstimate of employer contribution (3%) and taxes we would've paid it will come to 25%

So for every dollar (up to the max 4K per yr) I contribute, I get a quarter back.

$4000 % 12 months= $333 month

$333.00
$83.25 (25%)
--------
$249.75 Is the real amount taken out of my paycheck.

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