(Charlene Rhinehart, CPA)
The Credit savings bank, also known as a pension savings loan, is one of the most attractive awards for low- and middle-income taxpayers who are considering hiding their money in Roth IRA.
If you qualify, this IRS benefit allows you to seek credit for up to $ 1,000 (single files) or $ 2,000 (married couples who apply together). This is a valuable addition to your tax return, allowing you to reduce or eliminate your tax bill. It goes without saying that if you reduce your tax card, you have to keep more money in your pockets.
Unfortunately, most people who bill for this loan don’t even use it. Let’s break down the qualifications and how this loan can make Roth IRA contributions a little more exciting.
Image source: Getty Images.
Get extra credit to save
Saving towards retirement has never felt better. Every dollar you save in a Roth IRA could help you unlock a special surprise during taxation. Credit savings are an opportunity for taxpayers at the lower end of the tax rate scale to work the tax code in their favor by asking for a 50%, 20% or 10% credit for contributions paid into a qualified pension account.
