In: Finance
Man with $59,000 AGI, he contributed $5,500 to his traditional IRA. No distributions taken. What is their savers credit?
As per law, an individual is eligible for making eligible contributions within IRA, the percentage of tax credit depends on the AGI of the individual and the status in which the individual is filing the return.
Credit Rate | Married Individual Filing Jointly | Head of Household | All Other Filers |
---|---|---|---|
50 percent of individual contribution | AGI not more than $38,500 | AGI not more than $28,875 | AGI not more than $19,250 |
20 percent of individual contribution | $38,501 to $41,500 | $28,876 to $31,125 | $19,251 to $20,750 |
10 percent of individual's contribution | $41,501 to $64,000 | $31,126 to $48,000 | $20,751 to $32,000 |
0 percent of individual's contribution | more than $64,000 | more than $48,000 | more than $32,000 |
Based on the information provided in the question, it can be seen that that the total AGI of the individual is more than $32,000 and is not filing jointly, hence he is eligible for 0% savers credit based on the rules of 2019. Thus, the man would not be able to get any tax credit from the contributions made in the IRA.