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Posted by Kalyan on March 28, 2007, 5:15 pm
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I am ready to do taxes for year 2006. I have made
contributions to 401(k) retirement plan sponsored by my
company during 2006. I am wondering if I can get credit for
that contribution.
Thank you very much.
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Posted by Harlan Lunsford on March 30, 2007, 3:37 am
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Kalyan wrote:
> I am ready to do taxes for year 2006. I have made
> contributions to 401(k) retirement plan sponsored by my
> company during 2006. I am wondering if I can get credit for
> that contribution.
If your income was less than certain amounts, then you may
qualify for the retirement income credit. See form 8801
and instructions to see if you qualify.
ChEAr$,
Harlan Lunsford, EA n LA
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Barry Margolin on March 30, 2007, 3:37 am
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> I am ready to do taxes for year 2006. I have made
> contributions to 401(k) retirement plan sponsored by my
> company during 2006. I am wondering if I can get credit for
> that contribution.
You already have. 401k contributions aren't included in the
taxable wages on your W-2.
--
Barry Margolin, barmar@alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by bono9763@yahoo.com on March 30, 2007, 3:37 am
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> I am ready to do taxes for year 2006. I have made
> contributions to 401(k) retirement plan sponsored by my
> company during 2006. I am wondering if I can get credit for
> that contribution.
Your 401k contributions are reported on your W2 in box 12,
code D. You should notice that Box 1 Federal wages is lower
than Box 3 or 5, SS and Medicare wages, by an amount equal
to your 401k contribution. So these contributions have
already been subtracted from your taxable wages and aren't
being taxed.
In addition, if your income is low enough, you may qualify
for the Saver's Credit. This is claimed on Form 8880, and is
a credit to reduce the amount of tax you have to pay. In
order to qualify for this credit, your income has to be less
than $25,000 if single, $37,500 if head of household, or
$50,000 if married filing jointly.
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Mark Bole on March 30, 2007, 3:37 am
Please log in for more thread options Kalyan wrote:
> I am ready to do taxes for year 2006. I have made
> contributions to 401(k) retirement plan sponsored by my
> company during 2006. I am wondering if I can get credit for
> that contribution.
You will already be deferring income taxes on the
contribution due to it being omitted from your W-2 Box 1
wages.
If you are below the applicable income threshold, you might
be eligible for the saver's credit, although the threshold
has not been indexed for inflation and so doesn't work for
many taxpayers. It also won't help you if your tax is
already less than the amount of the credit.
The credit is 50% of qualified contributions for taxpayers
with modified adjusted gross incomes (MAGI) not exceeding
$30,000 (MFJ), $22,500 (HH), or $15,000 (all others). It
goes downhill from there as your income rises, no credit is
allowed for taxpayers with MAGIs exceeding $50,000 (MFJ),
$37,500 (HH), or $25,000 (all others).
I am guessing that many states have no credit at all
corresponding to this.
-Mark Bole
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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