During 2006, there was a tiny tax code update as a part of the Pension Protection Act that many people are unaware of, and I think it is helpful to get younger people excited about saving for retirement. Starting early is a critical factor when it comes to saving for retirement, and I am passionate about helping younger people make great financial decisions. Please share with any children, grandchildren, friends etc who might benefit. Here is a quick summary:
•You must be at least 18, not enrolled as a full-time student at any time during the year, and not claimed as a dependent on another person’s tax return
•Eligible Plans – IRA’s, Roth IRA’s, 401(k)’s, 403(b)’s, and 457 plans.
•Adjusted Gross Income Limitations – must fall below income limits for 2012 of $28,750, head of household filers of $43,125 and joint filers of $57,500.
The credit can be as much as $1,000 for single filers and $2,000 for joint filers, and is in addition to any deduction that may be available. The IRS Form 8880 can be found here: http://www.irs.gov/pub/irs-pdf/f8880.pdf. As always, consult a tax professional to see how this may applies as every one’s situation is unique and different.
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