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IRS Presents Credit for Retirement Savings Contributions

March 12, 2009 9:50 pm / Leave a comment

If you make eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement, you may be able to take a tax credit.
The Savers Credit, formally known as the Retirement Savings Contributions Credit, applies to individuals with a filing status and income of:
Single with income up to $26,500
Head of Household with income up to $39,750
Married Filing Jointly, with incomes up to $53,000
To be eligible for the credit you must be at least age 18, not a full-time student, and cannot be claimed as a dependent on another person’s return.
If you make eligible contributions to a qualified IRA, 401(k) and certain other retirement plans, you may be able to take a credit of up to $1,000 or up to $2,000 if filing jointly. The credit is a percentage of the qualifying contribution amount, with the highest rate for taxpayers with the least income.
When figuring this credit, you generally must subtract the amount of distributions you have received from your retirement plans from the contributions you have made. This rule applies for distributions starting two years before the year the credit is claimed and ending with the filing deadline for that tax return.
The Retirement Savings Contributions Credit is in addition to other tax benefits which may result from the retirement contributions. For example, most workers at these income levels may deduct all or part of their contributions to a traditional IRA. Contributions to a regular 401(k) plan are not subject to income tax until withdrawn from the plan.
For more information, review IRS Publication 590, Individual Retirement Arrangements, Publication 4703, Retirement Savings Contributions Credit and Form 8880, Credit for Qualified Retirement Savings Contributions. The publications and form can be downloaded at IRS.gov or ordered by calling 800-TAX-FORM (800-829-3676).
Links:
Form 8880, Credit for Qualified Retirement Savings Contributions (PDF 46K)
Form 1040, U.S. Individual Income Tax Return (PDF 176K)
Form 1040A, U.S. Individual Income Tax Return (PDF 136K)
Publication 590, Individual Retirement Arrangements (IRAs) (PDF 449K)
Tax Topic 610

How to Find Free Tax Services

March 6, 2009 6:23 pm / Leave a comment

The IRS provides free publications, forms and other tax material and information to help taxpayers meet their tax obligations. Free help is available on the IRS Web site, by phone, at local IRS offices and at many community locations.

• IRS.gov You can access free tax information at IRS.gov. At 1040 Central on the Individuals page, you can obtain forms, instructions and publications, learn about IRS e-file, determine your eligibility for the Earned Income Tax Credit, read about the latest tax changes and find answers to Frequently Asked Questions. In the Online Services section, you can access numerous applications to help with your taxes, including Free File, the IRS Withholding Calculator, the Alternative Minimum Tax Assistant, the EITC Assistant and more. You can also check the status of your refund by clicking on Where’s My Refund?

• Telephone Call the IRS Tax Help Line for Individuals, 800-829-1040, to get answers to your federal tax questions. To order free forms, instructions and publications call 800-829-3676. To hear pre-recorded messages covering various tax topics or check on the status of your refund, call 800-829-4477. TTY/TDD users may call 800-829-4059 to ask tax questions or to order forms and publications.

• Taxpayer Assistance Centers When you believe your tax issue cannot be handled online or by phone, and you want face-to-face assistance, you can find help at a local Taxpayer Assistance Center. Locations, business hours and an overview of services are available at IRS.gov. Just go to the “individuals” tab and click on the link for Contact My Local Office in the left tool bar section under IRS Resources.

• Community Resources Free tax preparation is available through the Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs in many communities. Volunteer return preparation programs provided through IRS and its partners offer free help in preparing simple tax returns for low- to moderate-income taxpayers. Call 800-906-9887 to find the VITA or TCE site nearest you. You may also call AARP — the largest TCE participant — at 888-227-7669 (888-AARPNOW) or access http://www.aarp.org/ to find the nearest Tax-Aide site.

For more information about services provided by the IRS, review Publication 910, IRS Guide to Free Tax Services available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Links:
Free File
AARP Tax-Aide
Forms and Publications
Frequently Asked Questions
Small Business/Self-Employed
Contact My Local Office
Publication 910, Guide to Free Tax Services (PDF 21,524K)

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