.
Source: www.irs.gov
.
Are you looking for a hard and fast rule about what income is taxable and what income is not taxable? The fact is that all income is taxable unless the law specifically excludes it.
Taxable income includes money you receive, such as wages and tips. It can also include noncash income from property or services. For example, both parties in a barter exchange must include the fair market value of goods or services received as income on their tax return.
Some types of income are not taxable except under certain conditions, including:
- Life insurance proceeds paid to you are usually not taxable. But if you redeem a life insurance policy for cash, any amount that is more than the cost of the policy is taxable.
- Income from a qualified scholarship is normally not taxable. This means that amounts you use for certain costs, such as tuition and required books, are not taxable. However, amounts you use for room and board are taxable.
- If you got a state or local income tax refund, the amount may be taxable. You should have received a 2013 Form 1099-G from the agency that made the payment to you. If you didn’t get it by mail, the agency may have provided the form electronically. Contact them to find out how to get the form. Report any taxable refund you got even if you did not receive Form 1099-G.
Here are some types of income that are usually not taxable:
- Gifts and inheritances
- Child support payments
- Welfare benefits
- Damage awards for physical injury or sickness
- Cash rebates from a dealer or manufacturer for an item you buy
- Reimbursements for qualified adoption expenses
For more on this topic see Publication 525, Taxable and Nontaxable Income. You can get it at IRS.gov or call to have it mailed at 800-TAX-FORM (800-829-3676).
Wednesday, February 12, 2014
Thursday, February 6, 2014
Report Name Change before You File Taxes
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Source: www.irs.gov
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Did you change your name last year? Did your dependent have a name change? If the answer to either question is yes, be sure to notify the Social Security Administration before you file your tax return with the IRS.
This is important because the name on your tax return must match SSA records. If they don’t, you’re likely to get a letter from the IRS about the mismatch. And if you expect a refund, this may delay when you’ll get it.
Be sure to contact SSA if:
- You got married or divorced and you changed your name.
- A dependent you claim had a name change. For example, this would apply if you adopted a child and that child’s last name changed.
File Form SS-5, Application for a Social Security Card, with the SSA to let them know about a name change. You can get the form on SSA.gov by calling 800-772-1213 or at an SSA office.
You can file Form SS-5 at an SSA office or by mail. Your new card will have the same SSN as before but will show your new name.
If you have an adopted child who does not have a SSN, use a temporary Adoption Taxpayer Identification Number on your tax form. You can apply for an ATIN by filing Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions, with the IRS. Get the form on IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Source: www.irs.gov
.
Did you change your name last year? Did your dependent have a name change? If the answer to either question is yes, be sure to notify the Social Security Administration before you file your tax return with the IRS.
This is important because the name on your tax return must match SSA records. If they don’t, you’re likely to get a letter from the IRS about the mismatch. And if you expect a refund, this may delay when you’ll get it.
Be sure to contact SSA if:
- You got married or divorced and you changed your name.
- A dependent you claim had a name change. For example, this would apply if you adopted a child and that child’s last name changed.
File Form SS-5, Application for a Social Security Card, with the SSA to let them know about a name change. You can get the form on SSA.gov by calling 800-772-1213 or at an SSA office.
You can file Form SS-5 at an SSA office or by mail. Your new card will have the same SSN as before but will show your new name.
If you have an adopted child who does not have a SSN, use a temporary Adoption Taxpayer Identification Number on your tax form. You can apply for an ATIN by filing Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions, with the IRS. Get the form on IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Wednesday, February 5, 2014
Top Ten Tips to Help You Choose a Tax Preparer
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Source: www.irs.gov
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Many people hire a professional when it’s time to file their tax return. If you pay someone to prepare your federal income tax return, the IRS urges you to choose that person wisely. Even if you don’t prepare your own return, you’re still legally responsible for what is on it.
Here are ten tips to keep in mind when choosing a tax preparer:
1. Check the preparer’s qualifications. All paid tax preparers are required to have a Preparer Tax Identification Number or PTIN. In addition to making sure they have a PTIN, ask the preparer if they belong to a professional organization and attend continuing education classes.
2. Check the preparer’s history. Check with the Better Business Bureau to see if the preparer has a questionable history. Check for disciplinary actions and for the status of their licenses. For certified public accountants, check with the state board of accountancy. For attorneys, check with the state bar association. For enrolled agents, check with the IRS Office of Enrollment.
3. Ask about service fees. Avoid preparers who base their fee on a percentage of your refund or those who say they can get larger refunds than others can. Always make sure any refund due is sent to you or deposited into your bank account. Taxpayers should not deposit their refund into a preparer’s bank account.
4. Ask to e-file your return. Make sure your preparer offers IRS e-file. Any paid preparer who prepares and files more than 10 returns for clients generally must file the returns electronically. IRS has safely processed more than 1.2 billion e-filed tax returns.
5. Make sure the preparer is available. Make sure you’ll be able to contact the tax preparer after you file your return - even after the April 15 due date. This may be helpful in the event questions come up about your tax return.
6. Provide records and receipts. Good preparers will ask to see your records and receipts. They’ll ask you questions to determine your total income, deductions, tax credits and other items. Do not use a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.
7. Never sign a blank return. Don’t use a tax preparer that asks you to sign a blank tax form.
8. Review your return before signing. Before you sign your tax return, review it and ask questions if something is not clear. Make sure you’re comfortable with the accuracy of the return before you sign it.
9. Ensure the preparer signs and includes their PTIN. Paid preparers must sign returns and include their PTIN as required by law. The preparer must also give you a copy of the return.
10. Report abusive tax preparers to the IRS. You can report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or changed the return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. You can get these forms at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Source: www.irs.gov
.
Many people hire a professional when it’s time to file their tax return. If you pay someone to prepare your federal income tax return, the IRS urges you to choose that person wisely. Even if you don’t prepare your own return, you’re still legally responsible for what is on it.
Here are ten tips to keep in mind when choosing a tax preparer:
1. Check the preparer’s qualifications. All paid tax preparers are required to have a Preparer Tax Identification Number or PTIN. In addition to making sure they have a PTIN, ask the preparer if they belong to a professional organization and attend continuing education classes.
2. Check the preparer’s history. Check with the Better Business Bureau to see if the preparer has a questionable history. Check for disciplinary actions and for the status of their licenses. For certified public accountants, check with the state board of accountancy. For attorneys, check with the state bar association. For enrolled agents, check with the IRS Office of Enrollment.
3. Ask about service fees. Avoid preparers who base their fee on a percentage of your refund or those who say they can get larger refunds than others can. Always make sure any refund due is sent to you or deposited into your bank account. Taxpayers should not deposit their refund into a preparer’s bank account.
4. Ask to e-file your return. Make sure your preparer offers IRS e-file. Any paid preparer who prepares and files more than 10 returns for clients generally must file the returns electronically. IRS has safely processed more than 1.2 billion e-filed tax returns.
5. Make sure the preparer is available. Make sure you’ll be able to contact the tax preparer after you file your return - even after the April 15 due date. This may be helpful in the event questions come up about your tax return.
6. Provide records and receipts. Good preparers will ask to see your records and receipts. They’ll ask you questions to determine your total income, deductions, tax credits and other items. Do not use a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.
7. Never sign a blank return. Don’t use a tax preparer that asks you to sign a blank tax form.
8. Review your return before signing. Before you sign your tax return, review it and ask questions if something is not clear. Make sure you’re comfortable with the accuracy of the return before you sign it.
9. Ensure the preparer signs and includes their PTIN. Paid preparers must sign returns and include their PTIN as required by law. The preparer must also give you a copy of the return.
10. Report abusive tax preparers to the IRS. You can report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or changed the return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. You can get these forms at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Monday, February 3, 2014
The Earned Income Tax Credit Gives Workers a Boost
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Source: www.irs.gov
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For nearly 40 years, the Earned Income Tax Credit has been helping low- to moderate-income workers by giving them a boost to their income. Four out of five eligible workers claim EITC, but the IRS wants every eligible worker to claim and get this credit.
Here are some things the IRS wants you to know about this important credit:
Review your eligibility. If you worked and earned under $51,567, you may be eligible for EITC. If your financial or family situation has changed, you should review the EITC eligibility rules. You might qualify for EITC this year even if you didn’t in the past. Workers who qualify for EITC must file a federal income tax return and specifically claim the credit to get it, even if they do not have a requirement to file a return.
Know the rules. Before claiming EITC, you need to understand the rules to be sure you qualify. It’s important to get it and get it right. There are several factors to consider:
- Your filing status can’t be Married Filing Separately.
- You must have a valid Social Security number for yourself, your spouse if married, and any qualifying child listed on your tax return.
- You must have earned income. Earned income includes earnings such as wages, self-employment and farm income.
- You may be married or single, with or without children to qualify. If you don’t have children, you must also meet age, residency and dependency rules.
- If you are a member of the U.S. Armed Forces serving in a combat zone, special rules apply.
Lower your tax or get a refund. The EITC reduces your federal tax and could result in a refund. If you qualify, the credit could be worth up to $6,044. The average credit was $2,355 last year.
Use free services. Don’t guess about your EITC eligibility. Use the EITC Assistant tool . on IRS.gov. The tool helps you find out if you qualify and will estimate the amount of your EITC. The best way to file your return to claim EITC is to use IRS Free File. Free brand-name software will figure your taxes and EITC for you. Combining e-file with direct deposit is the fastest and safest way to get your refund. Free File is available exclusively on IRS.gov/freefile. Free help preparing and e-filing your return to claim your EITC is also available at thousands of Volunteer Income Tax Assistance sites around the country.
If you are a member of the U.S. Armed Forces serving in a combat zone, special rules apply. For more information, see IRS Publication 596, Earned Income Credit. It’s available in English and Spanish on IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Source: www.irs.gov
.
For nearly 40 years, the Earned Income Tax Credit has been helping low- to moderate-income workers by giving them a boost to their income. Four out of five eligible workers claim EITC, but the IRS wants every eligible worker to claim and get this credit.
Here are some things the IRS wants you to know about this important credit:
Review your eligibility. If you worked and earned under $51,567, you may be eligible for EITC. If your financial or family situation has changed, you should review the EITC eligibility rules. You might qualify for EITC this year even if you didn’t in the past. Workers who qualify for EITC must file a federal income tax return and specifically claim the credit to get it, even if they do not have a requirement to file a return.
Know the rules. Before claiming EITC, you need to understand the rules to be sure you qualify. It’s important to get it and get it right. There are several factors to consider:
- Your filing status can’t be Married Filing Separately.
- You must have a valid Social Security number for yourself, your spouse if married, and any qualifying child listed on your tax return.
- You must have earned income. Earned income includes earnings such as wages, self-employment and farm income.
- You may be married or single, with or without children to qualify. If you don’t have children, you must also meet age, residency and dependency rules.
- If you are a member of the U.S. Armed Forces serving in a combat zone, special rules apply.
Lower your tax or get a refund. The EITC reduces your federal tax and could result in a refund. If you qualify, the credit could be worth up to $6,044. The average credit was $2,355 last year.
Use free services. Don’t guess about your EITC eligibility. Use the EITC Assistant tool . on IRS.gov. The tool helps you find out if you qualify and will estimate the amount of your EITC. The best way to file your return to claim EITC is to use IRS Free File. Free brand-name software will figure your taxes and EITC for you. Combining e-file with direct deposit is the fastest and safest way to get your refund. Free File is available exclusively on IRS.gov/freefile. Free help preparing and e-filing your return to claim your EITC is also available at thousands of Volunteer Income Tax Assistance sites around the country.
If you are a member of the U.S. Armed Forces serving in a combat zone, special rules apply. For more information, see IRS Publication 596, Earned Income Credit. It’s available in English and Spanish on IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Thursday, January 23, 2014
IRS Warns of Tax-time Scams
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Source: www.irs.gov
.
It’s true: tax scams proliferate during the income tax filing season. This year’s season opens on Jan. 31. The IRS provides the following scam warnings so you can protect yourself and avoid becoming a victim of these crimes:
- Be vigilant of any unexpected communication purportedly from the IRS at the start of tax season.
- Don’t fall for phone and phishing email scams that use the IRS as a lure. Thieves often pose as the IRS using a bogus refund scheme or warnings to pay past-due taxes.
- The IRS doesn’t initiate contact with taxpayers by email to request personal or financial information. This includes any type of e-communication, such as text messages and social media channels.
- The IRS doesn’t ask for PINs, passwords or similar confidential information for credit card, bank or other accounts.
- If you get an unexpected email, don’t open any attachments or click on any links contained in the message. Instead, forward the email to phishing@irs.gov. For more about how to report phishing scams involving the IRS visit the genuine IRS website, IRS.gov.
Here are several steps you can take to help protect yourself against scams and identity theft:
- Don’t carry your Social Security card or any documents that include your Social Security number or Individual Taxpayer Identification Number.
- Don’t give a business your SSN or ITIN just because they ask. Give it only when required.
- Protect your financial information.
- Check your credit report every 12 months.
- Secure personal information in your home.
- Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for Internet accounts.
- Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact and are sure of the recipient.
- Be careful when you choose a tax preparer. Most preparers provide excellent service, but there are a few who are unscrupulous. Refer to Tips to Help you Choose a Tax Preparer for more details.
For more on this topic, see the special identity theft section on IRS.gov. Also check out IRS Fact Sheet 2014-1, IRS Combats Identity Theft and Refund Fraud on Many Fronts.
Source: www.irs.gov
.
It’s true: tax scams proliferate during the income tax filing season. This year’s season opens on Jan. 31. The IRS provides the following scam warnings so you can protect yourself and avoid becoming a victim of these crimes:
- Be vigilant of any unexpected communication purportedly from the IRS at the start of tax season.
- Don’t fall for phone and phishing email scams that use the IRS as a lure. Thieves often pose as the IRS using a bogus refund scheme or warnings to pay past-due taxes.
- The IRS doesn’t initiate contact with taxpayers by email to request personal or financial information. This includes any type of e-communication, such as text messages and social media channels.
- The IRS doesn’t ask for PINs, passwords or similar confidential information for credit card, bank or other accounts.
- If you get an unexpected email, don’t open any attachments or click on any links contained in the message. Instead, forward the email to phishing@irs.gov. For more about how to report phishing scams involving the IRS visit the genuine IRS website, IRS.gov.
Here are several steps you can take to help protect yourself against scams and identity theft:
- Don’t carry your Social Security card or any documents that include your Social Security number or Individual Taxpayer Identification Number.
- Don’t give a business your SSN or ITIN just because they ask. Give it only when required.
- Protect your financial information.
- Check your credit report every 12 months.
- Secure personal information in your home.
- Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for Internet accounts.
- Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact and are sure of the recipient.
- Be careful when you choose a tax preparer. Most preparers provide excellent service, but there are a few who are unscrupulous. Refer to Tips to Help you Choose a Tax Preparer for more details.
For more on this topic, see the special identity theft section on IRS.gov. Also check out IRS Fact Sheet 2014-1, IRS Combats Identity Theft and Refund Fraud on Many Fronts.
Friday, December 27, 2013
BITS & PIECES
Forgive and forget:
- When you forgive someone, you do that someone a favor.
- When you forget someone, you do yourself a favor.
Well, you can do both. It's a win win situation.
Funny tests:
- Use fire to test gold
- Use gold to test women
- Use women to test men
- Use men to test gays
Marriage,
The first 3 years of marriage is critical. If you can make it, then your marriage would probably to last for a long time. Here is why:
- Year 1 (or first year of marriage): When you talk, she listens.
- Year 2: When she talks, you listen.
- Year 3: Both of you talk, and your neighbors will have to listen.
- Year 4: You will go out looking for someone listening to you.
The Earth,
When the earth was named, it wasn't named after any God. Because Earth was meant to be scientific studied and evolution processed.
Meat Eater
- Elephants have never eaten any meat, yet they are strong and huge.
- Lions always eat meat all their lives. Yet they are not any "Brainier" than monkeys.
Therefore, it's an eating habit. Not that meat is any healthier than vegetables. No one dies or gets stupid from eating too much vegetables, yet there are problems and sicknesses came from eating lots of meat.
Points to Ponder,
Illegally legal
OR
Legally illegal
A false sense of legality will change your life. When you are trying to do something, you will become someone. When you are trying to be/become someone, you will be that person's shadow.
Do not be fed up with the same one-sided world-view of Americans. People need to travel the world, read other cultural literatures, and watch more foreign movies in order to balance their thoughts.
Love,
Did primitive people have man vs woman love? If we live in a time and space where people have no sense of family or relationship obligation, and they can freely have sex to each other animal-wise. Then, does love have any meaning? does love stand its value? or had it ever been existed?
More about Love,
Men think, women feel
Men fall in love by women's look, that's why love at first sight. Women fall in love by men's talk.
2012 Election,
The rich Republicans and rich Democrats vote to protect their wealth and power. The average Joe's vote because they are sold a dream and promises that poor people WANT to have.
If people vote for their NEEDS, then they can put a right person in the office.
The senses,
What you see, hear, taste, touch and smell are limitted to the capabilities of your five senses. A pretty person is seen and thought differently from an average looking person. A nice voice is heard and agreed more easily than a whiny expression; that's why honey attracts more flies than vinegar. The English idiom "don't judge a book by its cover" reminds us to be aware of prejudging the worth of surface. However, more often than not we are depending heavily on our senses to explain the things we know not and understand not.
People fill in the blanks with their imagination based on appearance, language ability or accent. Which is very closed to what it's called "prejudice".
Suicidal Paradox
Suicide is cowardly, but a cowardice will not kill oneself. Therefore, suicide is brave, but a brave one has courageous endurance to face life. Thus, suicide is cowardly or brave?
Equality, what equality!
It's All Lies, human nature is all about disequality and instability. Rich people think, eat, live and conduct their lives mostly different from poor people. White people are not the only racists on earth. Black, brown and yellow people are racists too.
Human and nature depend heavily on instability and disequality to evolve and develope. Do you really think if black people did not fight for their rights, then the white people would voluntarily hand to them the passport to do things freely? How about countries that had been colonized, did they get their freedom without shedding of blood on their own soil? When a rich kid does not know how to do something, then he has not been trained. But when a poor kid cannot perform the same task, then he is stupid. Is that what you define social equality?
Arms Control
When you are the only one with big guns, you want to control the world. You did not mind how many men you killed, and how many women you raped. But once everyone has guns like yours, then you want arms control to place restrictions on the usage of such weapons.
What would you prefer?
1. I don't know... Therefore, God.
OR
2. I don't know... Therefore, I have to study it in order to understand the subject matter, and to better humanity probably.
Liberals are God gifted people. Without liberals, the conservatives would have said:
1. God gives us a pair of feet to walk. Thus, if we use some sort of vehicles to speed up our transportation, then we are against God's will.2. God did not give us a pair of wings, because God does not want us to fly. Therefore, the invention of flying machines is a sin.
If English is your second language, and someone picks on your speaking in an ill manner intentionally, and if you know your opponent is not an English person (from England), then here is what you can do:
You ask: "You are speaking English so well. Are you from England?"
He/She: "No, I am American"
You: "Then why don't you speak American? Why do you have to speak English?"
He/She: "English is American language."
You: "No, you STUPID, English is the language of people from England. You are using it because you don't even have your own language. If the Japanese or the German had their way in history, then you would be speaking their language now."
- Who would bother to learn your language anyway?
You reply: "That is because we are peaceful people. Even back in the old day, if we had guns or fire arms, we would not go to other countries to rob their resources, killed their men and raped the women. That is one good reason why our language is not so popular."
Tuesday, December 17, 2013
Three Year-End Tax Tips to Help You Save
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Source: www.irs.gov
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Although the year is almost over, you still have time to take steps that can lower your 2013 taxes. Now is a good time to prepare for the upcoming tax filing season. Taking these steps can help you save time and tax dollars. They can also help you save for retirement. Here are three year-end tips from the IRS for you to consider:
1. Start a filing system. If you don’t have a filing system for your tax records, you should start one. It can be as simple as saving receipts in a shoebox, or more complex like creating folders or spreadsheets. It’s always a good idea to save tax-related receipts and records. Keeping good records now will save time and help you file a complete and accurate tax return next year.
2. Make Charitable Contributions. If you plan to give to charity, consider donating before the year ends. That way you can claim your contribution as an itemized deduction for 2013. This includes donations you charge to a credit card by Dec. 31, even if you don’t pay the bill until 2014. A gift by check also counts for 2013 as long as you mail it in December. Remember that you must give to a qualified charity to claim a tax deduction. Use the IRS Select Check tool at IRS.gov to see if an organization is qualified.
Make sure to save your receipts. You must have a written record for all donations of money in order to claim a deduction. Special rules apply to several types of property, including clothing or household items, cars and boats. For more about these rules see Publication 526, Charitable Contributions.
If you are age 70½ or over, the qualified charitable distribution allows you to make tax-free transfers from your IRAs to charity. You can give up to $100,000 per year from your IRA to an eligible charity, and exclude the amount from gross income. You can use the excluded amount to satisfy any required minimum distributions that you must otherwise receive from your IRAs in 2013. This benefit is available even if you do not itemize deductions. This special provision is set to expire at the end of 2013. See Publication 590, Individual Retirement Arrangements (IRAs), for more information.
3. Contribute to Retirement Accounts. You need to contribute to your 401(k) or similar retirement plan by Dec. 31 to count for 2013. On the other hand, you have until April 15, 2014, to set up a new IRA or add money to an existing IRA and still have it count for 2013.
The Saver’s Credit, also known as the Retirement Savings Contribution Credit, helps low- and moderate-income workers in two ways. It helps people save for retirement and earn a special tax credit. Eligible workers who contribute to IRAs, 401(k)s or similar workplace retirement plans can get a tax credit on their federal tax return. The maximum credit is up to $1,000, $2,000 for married couples. Other deductions and credits may reduce or eliminate the amount you can claim.
For more on all these topics, visit the IRS.gov website.
Source: www.irs.gov
.
Although the year is almost over, you still have time to take steps that can lower your 2013 taxes. Now is a good time to prepare for the upcoming tax filing season. Taking these steps can help you save time and tax dollars. They can also help you save for retirement. Here are three year-end tips from the IRS for you to consider:
1. Start a filing system. If you don’t have a filing system for your tax records, you should start one. It can be as simple as saving receipts in a shoebox, or more complex like creating folders or spreadsheets. It’s always a good idea to save tax-related receipts and records. Keeping good records now will save time and help you file a complete and accurate tax return next year.
2. Make Charitable Contributions. If you plan to give to charity, consider donating before the year ends. That way you can claim your contribution as an itemized deduction for 2013. This includes donations you charge to a credit card by Dec. 31, even if you don’t pay the bill until 2014. A gift by check also counts for 2013 as long as you mail it in December. Remember that you must give to a qualified charity to claim a tax deduction. Use the IRS Select Check tool at IRS.gov to see if an organization is qualified.
Make sure to save your receipts. You must have a written record for all donations of money in order to claim a deduction. Special rules apply to several types of property, including clothing or household items, cars and boats. For more about these rules see Publication 526, Charitable Contributions.
If you are age 70½ or over, the qualified charitable distribution allows you to make tax-free transfers from your IRAs to charity. You can give up to $100,000 per year from your IRA to an eligible charity, and exclude the amount from gross income. You can use the excluded amount to satisfy any required minimum distributions that you must otherwise receive from your IRAs in 2013. This benefit is available even if you do not itemize deductions. This special provision is set to expire at the end of 2013. See Publication 590, Individual Retirement Arrangements (IRAs), for more information.
3. Contribute to Retirement Accounts. You need to contribute to your 401(k) or similar retirement plan by Dec. 31 to count for 2013. On the other hand, you have until April 15, 2014, to set up a new IRA or add money to an existing IRA and still have it count for 2013.
The Saver’s Credit, also known as the Retirement Savings Contribution Credit, helps low- and moderate-income workers in two ways. It helps people save for retirement and earn a special tax credit. Eligible workers who contribute to IRAs, 401(k)s or similar workplace retirement plans can get a tax credit on their federal tax return. The maximum credit is up to $1,000, $2,000 for married couples. Other deductions and credits may reduce or eliminate the amount you can claim.
For more on all these topics, visit the IRS.gov website.
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