Beginner: How Many Of You Take The Retirement Savings Credit?

[bluerafters]

https://finance.zacks.com/report-roth-i ... -4404.html

First time ROTH user in 2017. I have my W2's in hand and I've dropped them into TurboTax. All my ROTH Dividends / Capital Gains are set to reinvest via Vanguard. I'm researching how I might take / if I should take / if I qualify for the Retirement Savings Credit. Anyone else do this? What kind of documentation would this entail? What's a good documentation policy to follow for a ROTH going forward?

[obafgkm]

I can't help you on your question, but will point out that "Roth" refers to Senator William Roth, who sponsored the legislation setting up the Roth IRA. "Roth" is not an acronym, so it shouldn't be in all caps.

[djpeteski]

If you qualify, then yes you should take it. Free money.

However, I doubt many people qualify as it is income restricted. AGI has to be less than 31K for single, 62K for MFJ.

How many people, at those income levels qualify and also do not run a fowl of the other restrictions? I feel like the answer is very few.

Far more people are precluded from strait contributing to a Roth due to income limits.

[Edie]

We get the retirement savings credit. We have hovered around the top income limit for the past few years, so our decision making is always centered around how much of my spouse's $2000 IRA contribution goes into a Roth or traditional IRA to get us under the limit, and that's figured out in late January most years. I look forward to when we can put more money in, but for now, those are the decisions.

I don't understand your question though, your dividends/capital gains inside a Roth IRA account are not taxable, what are you trying to document?

[Watty]

Dividends within the Roth would not count. Only new retirement account contributions would count, but you can make the 2017 Roth contributions up until April 15th.

Anyone else do this? What kind of documentation would this entail? What's a good documentation policy to follow for a ROTH going forward?

Eligibility for this is based on your adjusted gross income after a bunch of adjustments and subtractions, as I recall that 401k contributions are subtracted from your salary so you might be able to qualify for it even though what you think of as your income might be higher.

You would fill out form 8880 to get this but your tax software should do that automatically.

https://www.irs.gov/retirement-plans/pl ... ers-credit

There was only one year when I was able to qualify for a partial credit because my wife was not working that year and I was making large(for me) 401k contributions.

[bluerafters]

I can't help you on your question, but will point out that "Roth" refers to Senator William Roth, who sponsored the legislation setting up the Roth IRA. "Roth" is not an acronym, so it shouldn't be in all caps.

Noted going forward.

[bluerafters]

We get the retirement savings credit. We have hovered around the top income limit for the past few years, so our decision making is always centered around how much of my spouse's $2000 IRA contribution goes into a Roth or traditional IRA to get us under the limit, and that's figured out in late January most years. I look forward to when we can put more money in, but for now, those are the decisions.

I don't understand your question though, your dividends/capital gains inside a Roth IRA account are not taxable, what are you trying to document?

For your records and record keeping. Paper copies or statements? Digital? Content to have everything inside of each online account?

[TG2]

As others noted, you fill out a form for the Saver's Credit. You list your IRA contributions on one line whether Roth or traditional and your elective deferral contributions on another. Add them up. They are subject to a $2000 limit. Bring in your AGI from your 1040 and check the schedule to see whether you qualify and at what percentage of credit.

You do not need to document Roth contributions with your tax return. You should keep records for yourself, but all IRA custodians report IRA contributions and year-end account values to the IRS each year. Is that what you are asking?

[BoilerUp]

We get the retirement savings credit. We have hovered around the top income limit for the past few years, so our decision making is always centered around how much of my spouse's $2000 IRA contribution goes into a Roth or traditional IRA to get us under the limit, and that's figured out in late January most years. I look forward to when we can put more money in, but for now, those are the decisions.

This mirrors our situation. We've been hovering for a few years....it's always a bit of guesswork and then a little dance in January to see what else may be needed into a traditional IRA if we're slightly over.

I have everything through Vanguard. I don't keep any special records. I'm content with the info I have available to me through Vanguard.