Retirement Savings: The Saver’s Credit Explained

Finally, remember that the Saver’s Credit is a tax credit, not a deduction. Credits are more valuable than deductions because they reduce your taxable income dollar for dollar. Tax deductions, on the other hand, reduce your taxable income, which in turns lowers your taxes but not as much as on a dollar-for-dollar basis.

Also, note that the Saver’s Credit is a non-refundable tax credit. This means you won’t get the credit in the form of a tax refund if your tax liability for the year is less than zero.

Next Steps for You

Strategizing your tax credits can get complicated. Knowing what you owe starts with knowing what you have. Get a handle on your finances with free online tools, which will give you a 360-degree view of your money, allow you to see all your accounts in one place, and go deeper into planning and analyzing your finances.

For individualized insights, consider hiring an unbiased tax advisor to help you determine the tax credits you may qualify for.

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Disclosure: Free tools, such as the ones offered through Personal Capital, can give insight into your whole ...

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