Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Tax Savers Credit 2013
Old 02-14-2014, 06:23 AM   #1
Dryer sheet aficionado
 
Join Date: Oct 2013
Posts: 35
Tax Savers Credit 2013

I had about $1000 last year in earned income (wages from a training session at the IRS that didn't pan out.) I put the money in my traditional IRA account, and I also wanted to take the Tax Saver's Credit. Turbo Tax says I can't, although I meet the income thresholds. (It would be a 50%, or $500 credit -- but they say its zero.)

Is it because I received $1100 from an old pension fund in 2013? Is that properly subtracted from my IRA contribution when calculating the credit? I understand the math and the form (and the instructions' terminology -- sort of). But I'm curious about the "why." Doesn't this discourage low-income retirees who take part-time jobs from saving more for retirement -- or does Congress/the IRS think that if you have any pension income, you don't need to save any more (ha)?
__________________

__________________
Rpharmer is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-14-2014, 06:27 AM   #2
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Maybe this part?

Get Credit for Your Retirement Savings Contributions

Quote:
Distributions 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 to distributions received in the two years before the year the credit is claimed, the year the credit is claimed, and the period after the end of the credit year but before the due date - including extensions - for filing the return for the credit year.
In other words, any contributions you make are offset by distributions you take from these plans. In this case it would not only include 2013 distributions but also distributions taken in 2011 and 2012 -- as well as distributions taken between 1/1/2014 and 4/15/2014 if I'm reading this correctly.
__________________

__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 02-14-2014, 01:19 PM   #3
Recycles dryer sheets
 
Join Date: Jul 2013
Posts: 129
Quote:
Originally Posted by ziggy29 View Post
Maybe this part?

Get Credit for Your Retirement Savings Contributions

In other words, any contributions you make are offset by distributions you take from these plans. In this case it would not only include 2013 distributions but also distributions taken in 2011 and 2012 -- as well as distributions taken between 1/1/2014 and 4/15/2014 if I'm reading this correctly.
So if someone did a Roth conversion in 2011 2012 or 2013 and wanted to contribute $1000 earned income to a 2013 Traditional IRA they would not get the credit because the conversions are distributions.

Suppose they contribute the $1000 to the Roth instead of the Traditional?
No distribution as taken from the Roth but maybe the Traditional distribution is counted.
__________________
Refresher is offline   Reply With Quote
Old 02-14-2014, 10:37 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,930
Quote:
Originally Posted by Refresher View Post
So if someone did a Roth conversion in 2011 2012 or 2013 and wanted to contribute $1000 earned income to a 2013 Traditional IRA they would not get the credit because the conversions are distributions.

Suppose they contribute the $1000 to the Roth instead of the Traditional?
No distribution as taken from the Roth but maybe the Traditional distribution is counted.
http://www.irs.gov/pub/irs-pdf/p4012.pdf
see bottom of p. G7

Roth conversions or IRA rollovers are not used against you .......seems fair as you aren't withdrawing retirement funds on an overall basis.
__________________
kaneohe is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
greetings, fellow money-savers... Celany Hi, I am... 4 04-30-2007 06:06 PM
?? for uber-savers, non-deductible IRA to Roth IRA in 2010 LOL! FIRE and Money 8 12-21-2006 01:25 AM
From debters to savers--advice needed tikitoast Hi, I am... 13 08-28-2006 03:13 PM
Super Savers REWahoo Young Dreamers 4 04-01-2006 12:33 AM
Best Savers in NJ REWahoo FIRE and Money 13 12-14-2005 05:41 AM

 

 
All times are GMT -6. The time now is 07:33 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.