Asked by Alexander Orton on Jun 16, 2024
Verified
Andrew and Eunice are married filing jointly with AGI of $48,000.They contributed $1,800 to a qualified retirement plan.How much is their retirement savings contributions credit?
A) $0.
B) $180.
C) $900.
D) $1,800.
Retirement Savings Contributions Credit
A tax credit that encourages low to moderate income taxpayers to make contributions to qualified retirement accounts.
AGI
Adjusted Gross Income is the total income minus specific deductions, used to determine taxable income on an individual's tax return.
Contributed
The act of giving or donating something, often for a cause or in context of capital given to a business or investment.
- Determine the credit received for retirement savings contributions by evaluating the adjusted gross income and the contribution amounts.
Verified Answer
MA
Marwah AlkhateebJun 17, 2024
Final Answer :
B
Explanation :
The retirement savings contributions credit, also known as the saver's credit, is a nonrefundable tax credit for eligible contributions to retirement plans. For a married couple filing jointly with an AGI of $48,000 and contributing $1,800 to a qualified retirement plan, the credit rate is 10%. Therefore, their credit amount is $1,800 * 10% = $180.
Learning Objectives
- Determine the credit received for retirement savings contributions by evaluating the adjusted gross income and the contribution amounts.