topic savers credit for roth not correct? in Retirement tax questions

savers credit for roth not correct?

landeskb — Thu, 06 Feb 2025 14:56:30 GMT

Adjustable gross income of $18,832

Taxable income $4,230

Total Tax (line 24) of $398

Roth contribution $6,500

Turbo tax says no savers credit because no tax owed. Why not a credit of $398?

Re: savers credit for roth not correct?

dmertz — Thu, 06 Feb 2025 18:51:33 GMT

This credit can only be used to reduce income tax, and not below zero. It cannot be used to reduced Other taxes such as self-employment tax or penalties for early distributions from retirement accounts.

Re: savers credit for roth not correct?

landeskb — Thu, 06 Feb 2025 19:53:10 GMT

The tax of $398 is directly from the tax table for single filers with income between $3,950 and $4,000. I forgot to mention she had ordinary dividends of $270.

Re: savers credit for roth not correct?

dmertz — Thu, 06 Feb 2025 20:23:10 GMT

Examine line 18 of Form 1040. If that line is already zero, this tax credit is not permitted.

Re: savers credit for roth not correct?

landeskb — Thu, 06 Feb 2025 20:26:32 GMT

I just created a new return with all of the same info and it correctly calculates the savers credit. There must be a bug somewhere that is using her student status from 2023 or something like that.

Re: savers credit for roth not correct?

landeskb — Thu, 06 Feb 2025 20:29:54 GMT

That line is $398 on both accounts: the original and the new person I just created. See my note a few minutes ago. There is a bug. Because my new return that I just created with all the same info correctly calculates it. I am wondering if it is using her student status from 2023 somehow on the original return.

I'm good. We will just use the new return instead of the original one.