How to Maximize the Savers Credit for 2023 Tax Filing
My husband and I are filing jointly for 2023 and I just realized we might qualify for the savers credit since our income is under $73,000. Right now, he's contributed about $1,246 to his qualified retirement plan at work, but I haven't put anything into my 401k this year. I was thinking of putting around $754 into my Fidelity Traditional IRA to get us to a combined $2,000 in contributions for 2023. I'm wondering if Fidelity would update my 2023 tax documents if I make this contribution now? And more importantly, if we hit that $2,000 combined contribution mark, would we qualify for the full $1,000 tax credit? We seriously underestimated our tax liability for 2023 and owe a pretty hefty amount to the IRS. I've already fixed my withholding for this year so it won't happen again, but I'm desperately trying to reduce our current tax bill. I'd much rather put money into retirement than just hand it over to the government. Any advice would be super appreciated!
19 comments
Join the conversation
Dmitry Popov
You're on the right track with the Savers Credit! Yes, you can still make contributions to a Traditional IRA for the 2023 tax year until the tax filing deadline (April 15, 2024). If you contribute $754 to your Traditional IRA, bringing your combined retirement contributions to $2,000, you could qualify for the Savers Credit. The credit amount depends on your exact adjusted gross income (AGI). For married filing jointly in 2023: - If your AGI is $43,500 or less, you could get 50% of contributions (up to $1,000) - If your AGI is $43,501-$47,500, you could get 20% (up to $400) - If your AGI is $47,501-$73,000, you could get 10% (up to $200) When you make the contribution, Fidelity will provide you with an updated Form 5498, but that form isn't required for filing your taxes. You'll just need to report the contribution on your tax return yourself.
0 coins
Ava Rodriguez
•Thanks for the info! One question - does it matter that the $1,246 contribution is from my husband's 401k and not an IRA? And also, if our AGI is around $68,000, then we'd only get 10% back as a credit, which would be $200 total, right? Is it still worth doing?
0 coins
Dmitry Popov
•The Savers Credit applies to contributions made to 401(k)s, IRAs, and other qualified retirement plans, so your husband's 401(k) contributions absolutely count toward the $2,000 total. It doesn't matter that they're different types of accounts as long as they're qualified retirement plans. If your AGI is around $68,000, you're correct that you'd fall into the 10% credit tier, which would give you a $200 credit (10% of your $2,000 contribution). While it's not as large as the $1,000 maximum credit, a $200 tax credit is still valuable because it directly reduces your tax liability dollar-for-dollar. Plus, you're building your retirement savings, which has long-term benefits beyond just the tax credit.
0 coins
Miguel Ortiz
Just wanted to share my experience with this! I was in almost the exact same situation last year and used https://taxr.ai to figure out how to maximize my Savers Credit. They analyzed my tax documents and showed me that I still had time to make an IRA contribution for the previous tax year. I was confused about how much I would actually save with the credit versus just paying the taxes, but the tool broke everything down for me. It showed exactly how much my contribution would reduce my tax bill through both the deduction AND the credit. For me, it was definitely worth making that last-minute contribution!
0 coins
Zainab Khalil
•Does taxr.ai handle self-employed situations too? I contribute to a SEP IRA and am never sure if I'm calculating the Savers Credit correctly.
0 coins
QuantumQuest
•I'm a little skeptical...how is this different from just using TurboTax or HR Block? They usually tell you if you qualify for credits like this.
0 coins
Miguel Ortiz
•Yes, it absolutely handles self-employed situations and SEP IRAs! It's actually really good with those more complex scenarios because it looks at your complete tax picture and helps optimize retirement contributions across different account types. The main difference from TurboTax or H&R Block is that this is focused specifically on finding tax-saving opportunities you might miss. The regular tax software tells you if you qualify based on what you've already done, but taxr.ai helps identify what you COULD do before the filing deadline to save more. It analyzes your docs and suggests specific moves like "contribute X amount to this account type by this date to save Y dollars.
0 coins
Zainab Khalil
I took the advice and tried taxr.ai for my situation with the Savers Credit. Wow - it actually found some things I completely missed! I had been contributing to my SEP IRA but didn't realize I could still make a spousal IRA contribution for my wife (who doesn't work) that would qualify for the Savers Credit too. The tool showed me exactly how much to contribute and by when. Ended up saving about $450 more than I would have otherwise. Definitely worth checking out if you're trying to maximize retirement contributions and tax credits like the Savers Credit.
0 coins
Connor Murphy
If you're having trouble getting through to the IRS to ask about the Savers Credit or other tax questions, I'd recommend https://claimyr.com. I spent days trying to reach someone at the IRS about a similar situation with retirement contributions and credits. Used their service and got through to an actual IRS rep in about 15 minutes instead of waiting on hold for hours. You can see how it works at https://youtu.be/_kiP6q8DX5c. They basically hold your place in line and call you when an agent is available. Saved me a ton of frustration when I had questions about my retirement contributions and credits.
0 coins
Yara Haddad
•How does this actually work? Does it just call the IRS for you? Seems like something I could do myself.
0 coins
Keisha Robinson
•Yeah right. Nobody gets through to the IRS that fast. I've been on hold for over 2 hours multiple times. This sounds like a scam to me.
0 coins
Connor Murphy
•It doesn't just call for you - it uses a system that keeps dialing and navigating the IRS phone tree until it gets a human, then it calls you and connects you. You don't have to sit on hold - you can go about your day and they call when they have an agent. I was super skeptical too! I had been trying for literally days to get through about my retirement account questions. The average wait time for the IRS is ridiculous these days. I figured it was worth trying since I was desperate to get answers before the contribution deadline. Was genuinely shocked when my phone rang and it was them connecting me to an actual IRS person.
0 coins
Keisha Robinson
I need to publicly eat my words about Claimyr. After posting that skeptical comment, I decided to try it anyway since I was desperate to ask about carrying forward unused portions of the Savers Credit. It actually worked exactly as described. Got a call back within 20 minutes and spoke to an IRS agent who answered all my questions about the Savers Credit and my retirement contributions. Saved me from making a mistake on my return that would have cost me money. Sometimes being proven wrong is a good thing!
0 coins
Paolo Conti
Just a quick tip - make sure you're looking at Form 8880 (Credit for Qualified Retirement Savings Contributions) when you file. This is where you'll calculate your Savers Credit. I missed this form my first time around and lost out on about $400 in tax credits!
0 coins
Sofia Ramirez
•Thanks for the tip! Will I need any specific documentation from Fidelity if I make this IRA contribution now for last year? And should I reduce the contribution amount since we'll only get 10% back?
0 coins
Paolo Conti
•You don't need any special documentation from Fidelity for your tax return. When you make the contribution, just make sure you specify it's for the 2023 tax year. Fidelity will eventually send a Form 5498, but that usually comes after the tax filing deadline and isn't needed to claim the credit. As for reducing the contribution amount, I'd still recommend contributing the full amount to reach $2,000 total. Even though you're only getting 10% back as a direct credit ($200), remember that traditional IRA contributions also reduce your taxable income. So you're getting both the $200 credit AND the tax deduction on your contribution, which at your income level could save you another 22% or so in taxes on that money.
0 coins
Amina Sow
Has anyone else had to amend their return to claim this credit after realizing they missed it? I'm in that boat right now and wondering if it's worth the hassle for the 10% credit.
0 coins
GalaxyGazer
•I amended last year for exactly this reason! It was a bit of paperwork but totally worth it in my case. Got back about $280 between the credit and the deduction on a $1,400 contribution. Just filed Form 1040-X with the corrected info and Form 8880 for the credit.
0 coins
Amina Sow
•Thanks for sharing your experience! $280 back on $1,400 is pretty good. I think I'm gonna go ahead with the amendment. I hate leaving money on the table, even if it's just a couple hundred bucks.
0 coins