Tax Talk: Government Rewards Savers with as Much as $2,000

By Brendan Hughes0 Comments

Those who consider themselves to have little income find it hard to set aside any money in a retirement plan. Those who make the commitment to put money away to benefit their financial future can receive a savers credit from the IRS. When you file your return a credit of as much as $2,000 can be given to taxpayers who are contributing to a retirement account.

To receive the savers credit, however, the taxpayer’s salary can be no more than $29,500 for 2013 or $59,000 for those filing jointly.

According to an article on DailyFinance.com:
“The credit applies to the first $2,000 you contribute to a retirement account or $4,000 for joint filers. With a maximum credit amount of 50 percent that means that singles can get a credit of as much as $1,000, while joint filers can collect up to $2,000.”

The percentage of contribution that you get back depends on your income level, the article explains.

Those who don’t qualify for the credit can still receive other tax benefits for contributing to a retirement account.  See this guide to find out more.