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Understanding Non-refundable Credits: Elderly Credit and Retirement Savings Contribution

This chapter covers essential non-refundable credits for the elderly, including the Retirement Savings Contribution Credit. It details specific aspects such as eligible income thresholds, application via Schedule R, and limitations outlined in IRS Publication 17. You will learn about the credit amounts based on filing status and how to utilize tax preparation tools to determine eligibility. Additionally, it highlights the unique benefit of claiming both the credit and tax deduction for retirement contributions, as well as the information needed from your W-2 forms.

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Understanding Non-refundable Credits: Elderly Credit and Retirement Savings Contribution

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  1. Chapter 27 Miscellaneous Credit

  2. Non refundable Credits • Credit for the Elderly • Retirement Savings Contribution

  3. Credit for the Elderly • Schedule R – Form 1040 Line 48 • Schedule 3 – 1040A Line 30 • Not on 1040EZ • Pub 17 – pg 225 – 228 • Resource Guide – pg G-4

  4. Limitations pg 226 Pub 17 • AGI Non taxable Income • Single,HH 17,500 5,000 • MFJ-Both 25,000 7,500 • MFJ – One 20,000 5,000 • MFS 12,500 3,750

  5. Amount of Credit • Let taxwise calculate the credit. • 15% of amount • See Schedule R

  6. Retirement Savings Contribution • Double Benefit – both this credit and deduction for IRS Contribution • Form 8880 • W-2 X in Box 12 Retirement gives indication of possible credit • X in Box 14 indicates state contribution

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