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February 8, 2011

Savers Credit Reduces the Cost Funding Retirement Accounts

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Your contributions to your retirement account may cost you less than you think. 

Individuals whose adjusted gross incomes (AGI) are below certain amounts are eligible to receive a nonrefundable tax credit of 50% of their contributions, up to a dollar limit of $1,000. This means that the cost of funding your IRA, and/or making salary deferral contributions to a 401(k), 403(b) or 457(b) plan can be reduced by as much as $1,000.
This nonrefundable tax credit is called the Saver’s Credit. Click here to see the AGI limits that apply to the previous and current calendar years.

Since this is a nonrefundable tax credit, the only way to benefit from it is to fund your retirement account.

See the article The Saver’s Credit- an Often Overlooked Retirement Savings Benefit for details on this provision.

Please share this information with someone who can benefit from this nonrefundable tax credit.

Tip provided byAppleby Retirement Consulting Inc. Appleby Retirement Consulting Inc provides Consulting, Coaching and Content on IRAs and other retirement plans to Financial, Tax and Legal professionals.

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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