You might already know that when you contribute to your IRA or to a 401(k) retirement plan at work, your money goes in without being taxed. That way, every penny you contribute gets to work for you. It stays in your account to grow tax-free for you, as well. The only time that you pay tax is when you pull it out.
However, the IRS has an even better deal for you if you contribute to your savings and your income meets its standards. Depending on your income, you could get back half of what you contribute, up to $1,000 in savings, to your account. As of the 2013 tax year, the IRS offers a 50 percent credit for singles with incomes of up to $29,500 or married couples with incomes up to $57,500. If your income is higher, you could still qualify for a 10 or 20 percent credit as long as your income is less than $28,751 if you’re single or $57,501 if you’re married.
The Phocus Companies have been helping their customers with their insurance and financial needs for a quarter of a century. Contact us to learn how you can use this tax credit to build your wealth.
