Today I would like to tell you about how you could get a tax credit for becoming a 401k Superhero to your future self. Sounds almost too good to be true right???
But first, let me ask you a question. The question is, how do you as a 401k or 403b participant become a 401k superhero to your future self?
That is the question, and these videos will give you the answers. Hey, I’m Jonathon Schultheiss and welcome to the Becoming a 401k Superhero videos.
There is a little known thing called the Tax Savers Credit and it gives you an actual tax credit for contributing to your companies 401k plan.
First let’s talk about the difference in a tax credit vs. a tax deduction.
A deduction just allows you to not have to pay taxes on the money that you spent.
Example: If you are in a 25% tax bracket and you have a $100 deduction, that means you saved $25 on your taxes.
However, if you get a tax credit, that amount is added to your refund at the end of the year or reduces that amount that you owe.
Example: If you get a $100 tax credit then you will either increase your refund by $100 or reduce the amount you owe by the full $100.
So here is the thing, the IRS actually allows you up to a 50% tax credit for contributing to your 401k or 403b plan.
That’s right, you can get a tax credit for saving into your 401k plan and becoming a 401k Superhero to your future self.
The tax savers credit phases out at an adjusted gross income of $68,000.
Keep in mind this is the adjusted gross.
This is not your gross, this is after dedications and standard dedications.
In 2022 the standard deduction for a married couple is $25,900.
So that means you could have a gross salary of around $93,900 and still be eligible for the tax savers credit.
Crazy right!
Listen, knowing how to reduce your taxes and save for retirement is one of the best ways to become a 401k Superhero to your future self.
If I can help you with anything, click on the link above and schedule a time to talk today.
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