Why is my tax software asking for my Roth IRA contribution info? Confused about reporting requirements

Oh wow, I had no idea this credit existed! So I'm not messing anything up by entering my Roth contributions? I was worried I was somehow double-dipping on tax benefits or something. Do you know what the income limits are to qualify for this credit? My AGI last year was about $38,000 since I was unemployed for part of the year.

You're definitely not messing anything up by entering your Roth contributions! This is exactly how the system is designed to work. The Retirement Savings Contribution Credit (also called the Saver's Credit) is specifically created to give an additional benefit to lower and middle-income taxpayers who are saving for retirement. For 2024, with an AGI of about $38,000, you would likely qualify for a 10% or 20% credit on your contributions, depending on your filing status. Single filers with AGI below $22,500 qualify for the 50% rate, between $22,501-$24,375 qualify for 20%, and between $24,376-$37,500 qualify for 10%. So you're right in that qualifying range!

Wait how does that work? Does it somehow connect to your accounts or do you have to upload statements? I've never heard of this service but I'm wondering if I've missed credits too.

I'm skeptical about these tax review services. How much did they charge you to file those amended returns? I bet they took a big chunk of that $1200.

The service doesn't connect directly to your financial accounts. You just upload your previous tax returns and any tax documents (like W-2s, 1099s, etc.) and their AI reviews everything to find missed deductions or credits. It's pretty straightforward - took me maybe 15 minutes to upload everything. They don't charge you to file the amended returns. Their system identifies the issues, explains them clearly, and then gives you the forms and instructions you need. You can either file the amendments yourself or use their partner service if you want help. I did it myself following their step-by-step guide and it was actually pretty easy.

How does that even work? Seems sketchy that they can somehow get priority in the IRS phone queue when normal people wait for hours.

Yeah right, so they just magically bypass the IRS phone system that keeps everyone else waiting for hours? I don't buy it. Probably just take your money and leave you hanging. The IRS is impossible to reach during tax season, everyone knows that.

It doesn't give you priority in the queue - that's not how it works. They have an automated system that calls the IRS and navigates through all the prompts and menu options for you, then waits on hold in your place. When an actual IRS representative picks up, their system calls you and connects you directly to that agent. You're still waiting in the same queue as everyone else, just not wasting your own time sitting on hold. The service is actually really transparent about the process. They can't guarantee how quickly you'll get through since that depends entirely on IRS wait times, but they handle the frustrating part of waiting on hold while you go about your day. For me it was worth it because I had already wasted hours trying to get through on my own.

Is the amended return process complicated? I think I might have missed claiming this for 2022 and 2023 but I'm worried about messing something up and triggering an audit.

Filing an amended return is definitely more involved than a regular return, but it's not terribly complicated if you're only changing one thing like adding the Retirement Savings Contribution Credit. You'll need to file Form 1040-X along with a new Form 8880 for each year you're amending. The key is to be very clear about what you're changing and why. In the explanation section of the 1040-X, simply state that you're claiming the Retirement Savings Contribution Credit that you were eligible for but didn't claim on your original return. Include documentation of your IRA contributions for that year if you have it. The typical processing time for amended returns is 16-20 weeks, so be prepared to wait a while for your refund.

Yes, the Saver's Credit does phase out completely at certain income levels. For 2024, if you're married filing jointly, the credit phases out completely if your AGI is above $73,000. With your combined income of around $70k, you should still qualify for the 10% credit rate. For married filing jointly in 2024, the brackets are: - 50% credit if AGI is $43,500 or less - 20% credit if AGI is $43,501-$47,500 - 10% credit if AGI is $47,501-$73,000 - No credit if AGI is above $73,000 So at $70k income, you'd get a 10% credit on up to $4,000 in combined retirement contributions, meaning a maximum credit of $400. Definitely worth claiming!