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The Savers Tax Credit for Low-Wage Workers

  April 26, 2022  |    #Live Fabulously

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How does the retirement saver’s credit work? 

Struggling with low wages? There be help for you.  Take the first step in reaching financial security by paying off your credit card debt. Start by getting your free copy of the 7-Step Credit Card Debt Slasher.

Think tax loopholes are only for the rich? Thin again. 

Tax loopholes are available to all of us. In fact, there’s a tax credit available only to people who make less than $30,000 a year for contributing to a retirement savings account.  So, how does the retirement saver’s tax credit work? And how do you know if you’re eligible?  Natalie Kolodij is the real estate tax strategist behind Kolodij Tax and Accounting, where she leverages innovative tax strategies to help clients escape the 9-to-5. Natalie has eight years of experience as an accountant and tax specialist, and she has been running her own firm since 2017. 

On this episode of Queer Money®, Natalie joins us to discuss the retirement saver’s tax credit, describing how it rewards those of us in a lower tax bracket for contributing to our retirement savings. Natalie explains how eligibility for the saver’s tax credit is determined by adjusted gross income and walks us through the AGI limits for Single, Married Filing Jointly and Head of Household filers. Listen in for Natalie’s insight on strategizing to take full advantage of the retirement saver’s tax credit and find out if you qualify for a $1,000 credit on your tax bill this year.

Insight on taking full advantage of retirement saver’s tax credit:

Topics covered on savers tax credit 

  • Natalie’s experience in tax strategy and why she’s committed to helping people escape the 9-to-5
  • What the saver’s tax credit is and how does it benefit people in a lower tax bracket
  • How the saver’s tax credit compounds the benefit of contributing to your retirement account
  • The difference between a tax credit and a tax deduction
  • How eligibility for the saver’s tax credit is determined by adjusted gross income or AGI
  • Natalie’s definition of AGI and examples of the variables that lower our taxable income
  • The saver’s tax credit AGI limits for single filers, married couples filing jointly and heads of household
  • Where to go for free or low-cost tax preparation services
  • How to determine if you’re eligible for the saver’s tax credit
  • Natalie’s insight on strategizing to take full advantage of the saver’s tax credit
  • Who benefits most from the saver’s tax credit (and why it’s particularly useful if you’re self-employed)
'We have a tax system where they know what we make and what you're going to owe, and then they still make you figure it out. It's a little backward, and it's backward on purpose because then it's on you to figure it out.' - Natalie Kolodij Click To Tweet

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Resources on savers tax credit

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We’re David and John Auten-Schneider, the Debt Free Guys and hosts of the Queer Money® podcast. We help queer people (and allies) live fabulously not fabulously broke by helping them 1) pay off credit card debt, 2) become part- or full-time entrepreneurs, and 3) save and invest for retirement.

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