Asked by Jalyn Froese on Jun 16, 2024

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Which of the account contributions qualify for the retirement savings contributions credit?

A) IRA.
B) 401(k) .
C) SEP.
D) All of these qualify.

Retirement Savings

Money that has been set aside or invested with the intention of providing income or financial support during retirement.

Contributions Credit

A tax credit that may be received for certain contributions made to retirement accounts or charitable organizations, aimed at reducing the taxpayer's overall tax liability.

IRA

Individual Retirement Account, a saving tool for individuals to allocate funds for retirement with tax advantages.

  • Ascertain the prerequisites and calculate the credit for contributions to retirement savings.
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Verified Answer

JR
Joanna ReyesJun 18, 2024
Final Answer :
D
Explanation :
All of the mentioned account contributions - IRA, 401(k), and SEP - qualify for the retirement savings contributions credit. This credit is meant to incentivize low- to moderate-income individuals to save for retirement by offering a tax credit worth up to $2,000, depending on income and contribution levels. Therefore, if you are eligible for this credit, contributing to any of these accounts can potentially reduce your tax bill and increase your retirement savings.