As Americans tighten their belts amid inflation and the effects of a cost-of-living crisis, the Internal Revenue Service (IRS) has reminded workers that it’s important to plan for their futures too.
On Monday, the IRS issued advice for low- and moderate-income taxpayers, pointing out that they can save for retirement now and possibly earn a tax credit in 2025 and future years as a result.
The Retirement Savings Contributions Credit, also known as the Saver’s Credit, “helps taxpayers offset a portion of the first $2,000 ($4,000 if married filing jointly) they voluntarily contribute to Individual Retirement Arrangements (IRAs), 401(k) plans and similar workplace retirement programs,” the IRS said in the document, which was published on its website. “The credit also helps eligible persons with a disability who are the designated beneficiary of an Achieving a Better Life Experience (ABLE) account and contributes to that account.”
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