Certain taxpayers are eligible for a tax credit

If your adjusted gross income is less than $50,000, you may be eligible for a nonrefundable credit against your income tax for elective contributions you make to §401 (k) plans,

§403(b) annuities, §457 plans, SIMPLE or simplified employee pension (SEP) plans, traditional or Roth IRAs, and voluntary after-tax employee contributions to a qualified retirement plan or a 403(b) annuity.

The amount of your credit can be as much as 50%, 20%, or 10% of your contribution depending upon your filing status and modified adjusted gross income, giving you a maximum annual credit of $1,000 ($2,000 if married filing jointly).

This credit was due to expire at the end of 2006; however, recently enacted legislation made this credit permanent. After 2006, the adjusted gross income limits will be indexed for inflation, making more taxpayers eligible for the credit.

Tax Tips Small Business

  • Employee Meals: When Does the 50-Percent Limit Apply?

    Don't reduce your deduction if you aren't required to

    In most cases, an employer is only allowed to deduct one-half of the expense that is paid to employees for meals. However, in some instances, the full amount is allowed.

    Read more ...

Small Business Quick Tip

  • Business Mileage Rate 2

    The optional standard mileage rate for the business use of an automobile is 54 cents per mile in 2016.
Friday, 22nd February 2019

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Tax Tips Personal

  • Tax Break for Reservists Called to Active Duty

    Penalty-free withdrawals from retirement plans

    If you are a reservist or national guardsman who was ordered or called to active duty for a period in excess of 179 days, you may withdraw money from your qualified retirement plan or IRA without incurring the 10% premature distribution penalty.

    Read more ...

Personal Quick Tip

  • Making Gifts

    Are you planning on making any substantial gifts? Talk to your tax preparer first. Gifts with values exceeding $14,000 must be reported to the IRS.