If you contribute to a retirement savings account, either at work or on your own, you might be able to get a double tax break.
The Saver’s Credit provides low- and moderate-income workers the opportunity to offset part of their contributions to an IRA, as well as money put into a company retirement plan.
Because this is a tax credit instead of a deduction, you get more bang for your tax break buck. A tax deduction reduces your income, meaning the tax bill you compute using that income amount should be smaller.
But a credit is claimed after you arrive at your tax bill. The credit amount reduces that tax bill dollar-for-dollar. If you owe $1,000 and are eligible for a $500 credit, your tax bill is halved. ...