How do I sign up for the saver's tax credit?

By Denise Appleby AAA
A:

The saver's tax credit is a non-refundable tax credit available to eligible taxpayers in the U.S. who make contributions to their employer-sponsored 401(k), 403(b), SIMPLE, SEP or governmental 457 plan and/or make contributions to their Traditional and/or Roth IRAs. The saver's tax credit is claimed when you file your tax return for the year.

If your tax return is prepared by a professional, remind him or her that you are eligible for the credit and that he or she must file IRS Form 8880, which is available at the IRS website. If you file your own return, you should complete the form and attach it to your tax return. The credit amount is indicated on the line labeled "retirement savings contributions credit", in the "tax and credits" section of your tax return.

To learn more about taxation and retirement plans, read The Saver's Tax Credit: An Added Incentive To Fund Your Plan, Avoiding IRS Penalties on Your IRA Assets and Retirement Plan Tax Forms You May Need to File - Part 1.


This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS

  1. Can I purchase mutual funds for my IRA?

    Learn how to invest your IRA assets in mutual funds. Discover a few of the different types of mutual funds available for ...
  2. How are savings bonds taxed?

    Learn who is responsible for reporting U.S. EE savings bond interest for taxation and when the interest can be reported for ...
  3. Are credit card rewards considered taxable income by the IRS?

    Learn about when the Internal Revenue Service considers the financial value of gifts received from credit card reward programs ...
  4. How do Pay As You Go pension plans work?

    Learn how pay-as-you-go pension plans are different than fully funded pension plans and why some government plans are running ...
RELATED TERMS
  1. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  2. Deferred Tax Asset

    A deferred tax asset is an asset on a company's balance sheet ...
  3. Working Tax Credit (WTC)

    A tax credit offered to low-income individuals working in the ...
  4. Gold IRA

    Definition of Gold IRA
  5. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  6. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...

You May Also Like

Related Articles
  1. You need to be patient, diligent and perseverant to be successful at investing, but more importantly, you need to start early.
    Investing Basics

    Why You Should Start Investing Early? ...

  2. It can be great to live in the moment, but the actions and decisions you make now can greatly impact your sense of financial security down the road.
    Personal Finance

    How Do Americans Keep Minimizing Their ...

  3. Many of us fantasize about winning a big lottery jackpot. Let’s say that actually happened? What would you do with the money? How would you manage it?
    Professionals

    Tips For Managing A Cash Windfall

  4. Retirement

    Planning Ahead for 2015's Tax Law Changes

  5. Even though inflation currently seems tame, it's still the worst enemy of retirees. Here are some tips to reduce its impact.
    Professionals

    Tips For Managing Inflation In Retirement

Trading Center