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You may be able to cut down your tax bill with a little-known credit if you saved for retirement this year

The Saver's Credit enables low- to moderate-income taxpayers saving for retirement to reduce their tax bill by up to $2,000.

The Saver's Credit gives eligible taxpayers saving for retirement a tax break.
  • tax credit
  • tax deductions
  • tax return
  • $63,000 as a joint filer.
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If you saved money in a retirement account in 2018, you may be eligible for a tax break called the Saver's Credit.

The Saver's Credit enables low- to moderate-income taxpayers saving for retirement to reduce or eliminate their tax bill by up to $1,000, or $2,000 if married and filing jointly.

Only 12% of American workers with an annual household income of less than $50,000 know about the Saver's Credit, according to Turbo Tax.

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Tax credits, like tax deductions, can help you pay less income tax, according to the IRS. Tax credits, however, are subtracted directly from the amount you owe in taxes on a dollar-for-dollar basis, while tax deductions are subtracted as a percentage from your gross income.

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To be eligible for the Saver's Credit, you must meet three requirements: You're at least 18 years old, not a full-time student, and aren't claimed as a dependent on someone else's return. Your adjusted gross income (AGI) also must be less than $31,500 if you're a single filer, and less than

Depending on your income, you can claim a credit that's equal to

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Note that rollover contributions and employer contributions aren't eligible, and any recent distributions from your ABLE account, IRA, or retirement plan may lessen your eligible contributions.

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