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What is the Saver’s Tax Credit?

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One of the most overlooked tax credits is also one of the best. If you qualify for this credit, the government actually pays you to contribute to your retirement account. It’s called the Saver’s Credit (officially the “Retirement Savings Contributions Credit”), and it’s one you don’t want to miss.

The Saver’s Credit is designed to help low to moderate income earners who put money into a 401(k), IRA, or similar retirement fund.  If you qualify, the Saver’s Credit can save you up to $1,000, or $2,000 if you are filing jointly.

How to qualify

As with any tax credit, there are certain requirements you must meet to qualify for the savings:

  1. You have to be making retirement account contributions
  2. You have to be at least 18 years old
  3. You cannot be a full-time student
  4. You cannot be claimed as a dependent on someone else’s tax return
  5. Your Adjusted Gross Income (AGI) must fall below the specified level

You should be able to know fairly quickly if you meet qualifications one through four.  However, figuring out if you fall into the eligible income category might be a little trickier.  We’ll help you sort through it.

Income Limits

Your AGI is your total income minus certain reductions. Figuring out your AGI with tax software like TurboTax is a snap. For most people, a good rule of thumb is that your AGI is your gross income less any elective deferrals or deductible contributions to a retirement account.

Once you figure out your AGI, you just have to see whether you fall below the AGI limits.

2014 Saver’s Tax Credit Income Limits

  • If you’re a single filer this year, your AGI limit is $29,500
  • If you’re the head of a household, your limit is $44,275
  • If you’re a married couple or joint filer, your limit is $59,000

2013 Saver’s Tax Credit Income Limits

  • If you’re a single filer this year, your AGI limit is $30,000
  • If you’re the head of a household, your limit is $45,000
  • If you’re a married couple or joint filer, your limit is $60,000

2012 Saver’s Tax Credit Income Limits

  • If you’re a single filer this year, your AGI limit is $28,750
  • If you’re the head of a household, your limit is $43,125
  • If you’re a married couple or joint filer, your limit is $57,500

(Source: IRS (2013) and IRA 2014)

Depending on your income, your tax bill will be reduced by a percentage of the amount you contribute to your retirement fund—ranging from 10% to 50%.  You’ll use IRS Form 8880 to figure out the exact amount, or use a program like TurboTax, which figures it out for you.

Qualifying retirement accounts

Contributions to just about any retirement account qualify for the credit. In addition to contributions to a traditional or Roth IRA, you can also contribute to any of the following:

  1. Elective deferrals (including after-tax Roth contributions, if available) to a:
    • 401(k) plan (including a SIMPLE 401(k) and the federal Thrift Savings Plan),
    • SIMPLE IRA plan
    • SARSEP
    • 403(b) annuity
    • governmental 457(b) plan
  2. Contributions to a §501(c)(18) plan, and
  3. Voluntary after-tax employee contributions to a qualified retirement plan or 403(b) annuity. For purposes of the credit, employee contributions will be voluntary as long as they aren’t required as a condition of employment.

An Example

Let’s look at an example to get a better understanding of how the Saver’s Tax Credit works.  Let’s say Tom is a single filer who qualifies for a 20% Saver’s Tax Credit.  His AGI is $18,000 after he contributes $2,000 to his employer’s 401(k) plan.  Tom receives a tax credit equal to 20% of his total contribution of $2,000 (assuming 2013 income limits).  That means Tom will pay $400 less in taxes than he would have paid had he not contributed to his 401(k).

The credit is a “non-refundable” tax credit. That means that while it can reduce your tax liability to zero, you won’t get back any remaining credits.

Next Steps

If you qualify for the Saver’s Tax Credit, all you have to do is fill out the correct forms.  Many low-to-mid earners use the 1040EZ form to file taxes.  Unfortunately, this is a problem because the credit can only be claimed on Forms 1040A, 1040, and 1040NR.  The tax credit can significantly reduce your tax bill, so you might seriously consider switching forms.

As noted above, if you use software to fill out your taxes, make sure you answer all the questions about the Saver’s Credit, Retirement Savings Contributions Credit, and Credit for Qualified Retirement Savings Contributions.  Answering these questions can help guide you in the right direction and ensure you receive your tax credit.  If you don’t use software, but instead prepare your taxes by hand, complete Form 8880.  This form will help you find your credit rate, which will tell you the exact amount you will save.  You will then transfer that figure to Form 1040A, 1040, or 1040NR.

This credit is designed to help workers who contribute money towards their retirement.  Unfortunately, only 12% of full-time workers in households making less than $50,000 know about it.  Don’t be part of that 88% and miss out on this easy savings opportunity.The Saver’s Tax Credit is a great way to take your retirement savings goals off the back burner. Find out who’s eligible and how much money you could get!

The post What is the Saver’s Tax Credit? appeared first on The Dough Roller.



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How to Change/Update Name in Aadhaar Card after Marriage

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Aadhaar card is one of the most important proofs of identity and address these days. It can easily be downloaded, carried in the digital form and shared instantly for authentication/verification. Aadhaar card contains both biometric as well as the demographic details of the user making it better than any other identity proof. It contains demographic details such as name, date of birth, gender, address, etc. One can get these details updated as and when wanted. In case of women, they can get their name changed in Aadhaar card after marriage quite easily.

How can women change name in Aadhaar card after marriage?

A woman generally adds her husband’s title to her name after marriage. Even though it is not mandatory, but the addition of title to the name is quite prevalent. However, if you want to add the title to the name legally, you will have to get it updated in your document proofs as well.

Updating your name in the Aadhaar card is not a tough task. You can follow the steps mentioned below to update your name in Aadhaar card after marriage:

  • Visit a nearby Aadhaar Enrolment Centre (Click here to locate one)
  • Provide your Aadhaar number to the executive
  • Fill the Aadhaar Enrolment Form and submit it with the required document proof to the executive
  • The executive takes your biometric data for authentication and feeds the details
  • The document proof is scanned and the original document is returned back
  • Once the application process is complete, the executive gives an acknowledgement slip that contains the acknowledgement number
  • This acknowledgement number can be used to track the status of Aadhaar update
  • Finally, make the payment of a fee of Rs. 50 (including taxes)

What are the documents required for updating the name in Aadhaar card?

A woman who wants to get her name changed in Aadhaar card after marriage has to provide certain documents at the time of updating details at the Aadhaar Enrolment Centre. The applicant has to submit the Marriage Certificate containing address issued by the Government.

It is worth mentioning that the applicant has to take the original Marriage Certificate with her. The executive scans the copy and returns the original certificate. In case the applicant provides a photocopy of the original, the application may be rejected at the time of approval.

Alternatively, the applicant can furnish any of the following documents to get the name changed in Aadhaar after marriage:

  • A document containing a proof of the marriage of the applicant issued originally by the Marriage Registrar
  • Legally approved name change certificate
  • Identity Certificate containing the photo of the applicant on a proper letterhead issued by either a Gazetted Officer or a Tehsildar

What is the fee charged for updating name in Aadhaar card after marriage?

An applicant has to pay a fee of Rs. 50 (inclusive of all taxes) to the executive once the update request is submitted and he gets the acknowledgement slip. The executive cannot ask for a fee more than the prescribed limit by the UIDAI. In case an executive does so, you can file a complaint online through the Grievance Redressal Mechanism.

In how many days will the name in Aadhaar card get updated?

It may take up to 90 days for updates to reflect in the Aadhaar card. However, you can check the details in your Aadhaar online and if updated, it will reflect in your Aadhaar card. The acknowledgement slip contains the URN (Update Request Number) which can be used to check the status of the Aadhaar card.

Will UIDAI send me the updated Aadhaar card? If not, what should I do?

UIDAI send an updated Aadhaar card to the address mentioned in the Aadhaar card through India Post. In case you do not receive the updated Aadhaar card, you can also order Reprint of Aadhaar online. A fee of Rs. 50 (taxes included) has to be paid online and the Aadhaar copy is sent to the cardholder’s address.

Can my application for name change in Aadhaar after marriage be rejected?

Yes, the application for updating the name in Aadhaar card can be rejected on grounds of incorrect or unverifiable document proof attached at the time of application. It is thus recommended that you carry the original marriage certificate at the time of updating your name in Aadhaar.

The post How to Change/Update Name in Aadhaar Card after Marriage appeared first on Compare & Apply Loans & Credit Cards in India- Paisabazaar.com.



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Can The PPP Loan Affect Your Credit Score?

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(The following is a transcription from a video my real estate agent, Jake Blount, and I recorded. Please excuse any typos or errors.)

Can the Paycheck Protection Program (PPP) Loan negatively affect your credit score?

And, can it prevent you from getting approved for a mortgage?

It seems the answer is yes.

I wanted to understand this better. So, I sat down with my real estate agent, Jake Blount, to discuss how to work through this if you got the PPP loan and are trying to get a mortgage (or other loan).

We will be providing some information that just may help you avoid your credit score being affected negatively by the PPP loan, and help you get that loan approved.

We welcome you to view our discussion with our SeedTime community, here:

Below is a the transcript from our conversation:

The PPP Loan

Bob Lotich: I have my friend and real estate and Jake here and we were chatting the other day and I got the PPP loan and he said, “Hey, fun fact about the PPP loan, it can prevent you from getting a mortgage.” And so I want to hear all about this. I want to hear what this situation is because I don’t think anybody knows about this. I haven’t heard about this at all. Tell me what the deal is like, what happened? What was the story here? Where are we?

It Can Prevent You From Getting A Mortgage

Jake Blount: Basically it wasn’t a client, it was actually myself. That makes it closer to home, more personal. Basically we had been planning on buying a new house for a while and renting out our current house to try to build up some rental income and kind of rental properties. And house had on the market on our street for a while and we finally were like, okay, I think this is the time it’s been on for a while. And so we were going to start to kind of go down that path. And so we’re like, great, we got our taxes done. Little bit of a rough start from the beginning of coronavirus, but we were able to get the PPP, which brings us to why we’re kind of talking about this now in the first place. Get the PPP in May, May 5th. It was the first round of getting it. Great. We got it in my bank account. I had lost a couple deals.

Bob Lotich: Got some money. Yay!

Jake Blount: Yeah, got some money. Cha-ching. Had a couple of deals fall through, so it was perfect. It got me right through the time to when some of those deals started coming back again. I had a couple of deals that were ready to close. I’m feeling good. It’s time to move forward with this purchase. And so we got our taxes done. Now it’s time to talk to the lender. Let’s get the mortgage. Verbally I talked on the phone what our income was, where we’re at, what we’re planning on doing. He’s like, “Great. “You will qualify for this no problem. Great.” All right, pumped. He was like, “All right, well, we’re going to do this thing. Let me look at your credit report.” Pull his credit report. He’s like, okay, this is fine. You know, a little $35 a month credit card, no big deal. And then he’s like, “What is this $750 a month loan?” And I was like, “Wait, what?” He’s like, “What is this maxed out $750 a month loan?” I was like, “Ah, I don’t have a maxed out 700. What are you talking about?” My first thought is somebody has frauded us.

Is Fraud The Issue?

Bob Lotich: Stolen my identity or something.

Jake Blount: Yeah, so that’s the first thing I say is, “I think someone has stolen my identity.” And he was like, “It’s happened before. We got to figure this out.” And I was like, “Where’s it at?” He’s like, “It’s at Pinnacle Bank.” And I’m like, “Pinnacle Financial Partners, that’s who I bank with.” And I was like, “Wait, I bank there.” I’m like, “Somebody stole my identity and had the audacity to pull a huge loan in my name.”

Bob Lotich: At your bank.

Jake Blount: At my bank. And so I’m totally following this whole thing of fraud or whatever, thinking that that was what’s happening. Because I’m all in thinking, I’m not thinking about the Paycheck Protection Program, which is it ended up being was the Paycheck Protection Loan was that loan because it was at the time a two year payback period. If you’re talking about a $15,000 loan with a two year payback period, so it was this massive debt on my account and totally.

Bob Lotich: Unexpected. You didn’t know it was there.

Jake Blount: Unexpected.

Is The PPP Loan Actually A Loan?

Bob Lotich: Well, and everybody gets a PPP loan because you don’t really view it as a loan because it’s forgivable and everybody I assume is going through it thinking, I’m going to get the forgiveness and it doesn’t exist as a loan.

Jake Blount: Or it did. Yeah. And so I called my banker and that was the first thing I asked him. I’m like, “Hey, what is this deal? What is going on?” And he starts laughing. I’m like, “Why are you laughing at me? I’m going through a bad time here. And you’re going to laugh at me.” And he said, he was like, “I’ve had this phone call five times this week already.” I’m like, “Really?” I was like, “What’s going on?” He’s like, well, as you’ve kind of explained some of the previous videos, the Paycheck Protection Program it changes every couple weeks they have a new thing because I’m guessing that businesses are coming back and saying, “Hey, this isn’t working for us.” And they want it to be helpful because that’s the purpose of the loan. That’s when I went on a research binger and I think this is where Bob and I, we share a common brotherhood, research.

Bob Lotich: Research. Yeah, yeah, for sure.

Jake Blount: I started reading about it and basically that’s when I kind of started finding out that it was supposedly, most small business association loans are not personal or they’re not personally guaranteed, but they are reported to the credit bureaus.

Bob Lotich: Credit bureaus.

Jake Blount: Yeah. Yeah. And this one was supposedly not going to be that way because it was this forgivable loan. It had a weird kind of payback period. That was the original intent of the loan. But then they were actually not even supposed to report it at all, but now they’re reporting it to personal credit and loan.

Bob Lotich: Wow.

Jake Blount: And that’s what affected my mortgage because they were looking at it as this is a personal guaranteed loan.

Resolving The Issue

Bob Lotich: Where did it go from there? I’m assuming you got those resolved in your case.

Jake Blount: Almost.

Bob Lotich: Almost.

Jake Blount: Yeah. I have the good news.

Bob Lotich: All right, let’s talk about the good news.

Jake Blount: Immediately I’m asking the banker, “What can we do about this?” Because we know the intention is everybody in America, everybody knows what that means and how it works. And we kind of made some suggestions about him writing a letter to the mortgage lender and saying, “This is the purpose of the loan. And so therefore we can’t consider this or we shouldn’t consider this on your personal thing. Plus it’s going to be forgiven because it was used in the right purposes.” And the lender was still, “We have rules, because of 2008 and the crashes where they used to just if you had 20% down, they’d give you any size loan. You had 20% down.” All that’s changed.

And so the good news is if your lender they’re starting to work this out because we’re kind of the first round of people who are finally starting to get back on their feet, moving forward. And they’re like, now I’m going to start looking at that house that I was going to buy in March. I’m going to start trying to look into that now in June, July, August. And so now that’s when lenders are starting to figure it out. My lender personally, at Movement Mortgage, he said that they actually are at the very top writing a letter that kind of states what this is to send to the underwriters. And supposedly the underwriters are going to accept it. I don’t know because my banker also said he’s had a couple people not able to get the loan because of it.

Bob Lotich: That is crazy. It’s just amazing how quickly this whole thing rolled out and all of the kind of dominoes that are falling and the negative effects of this and the fact that some people are not able to get a mortgage because of this, unknowingly. They had no idea.

Jake Blount: The banker told me that it was, they didn’t know because it wasn’t supposed to happen this way. The intention of the loan was to never be on your personal credit report.

Bob Lotich: Okay. If somebody is watching this and they’re in this situation, what do you have any suggestions?

What You Should Do

Jake Blount: Yeah. The first thing is, there’s a differentiation of when you got the loan, this may be getting too much info.

Bob Lotich: You can never have too much.

Jake Blount: But if you’re before June 5th, it was defaulted to a two year payback period. If you’re after June 5th, it’s defaulted to a five year payback period.

Bob Lotich: Okay. That’ll change things considerably.

Jake Blount: That will change things considerably because that’s a very big difference in your payment scheduling. Also, you can talk to your bank if you had it pre June 5th, which and there you can renegotiate it.

Bob Lotich: To turn into a five year or something?

Jake Blount: To five year.

Bob Lotich: That reduces your monthly payment. And that would just look better.

Jake Blount: Oh, way better need that day to come.

Bob Lotich: For the mortgage company. Okay.

Jake Blount: It looks way better.

Bob Lotich: That’s one way. And then you said, who was it? Your banker is writing a letter to the mortgage company?

Jake Blount: He said he could write a letter basically stating, this is the literal law that the banker can send to the lender to say, “Hey, this is forgivable. This is now five years. At worst case scenario, if it’s not forgivable, it’s a five year loan so it looks a lot better.” And then the third thing would be if your mortgage lenders could already be taking right steps to get this sort of situated anyways. Also, the first round of forgiveness applications, I think starting July 6th. That’s another way to get it forgiven, wiped away so that you can move forward.

Bob Lotich: Yeah, that’s great. I think the moral of the story here is that the thing is just a mess, but bottom line is some people are already in this situation and you gave us three different things we can do to kind of move forward in that. And that’s making the best of the situation we’re in.

Jake Blount: Exactly, yeah. Because this is probably going to be your window unless you’re crushing the rest of 2020, let’s hope we do. It might be a dip on your income so 2021, you might have to wait till next tax season 2022.

Bob Lotich: Yeah. All right. Well, if you’re in Nashville, you need a great real estate agent, Jake is my guy and I recommend him highly. But other than that, that’s all we have for you today. Be blessed, be blessing. See you soon.

SeedTime Money Mastery Quiz

Hey, thanks so much for watching the video. If you haven’t yet taken our Money Mastery quiz, be sure to do that.

Linda Lotich: Yeah, It’s just a super quick two minute quiz and it’s going to help you understand how good you are with your money.

Bob Lotich: Yeah, and it’s going to provide a custom report giving you specific suggestions of how you can reach your financial goals up to 10 times faster. Head over to: seedtime.com/quiz to get started now.



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What is Adjusted Gross Income (AGI)?

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If you’ve read a bit about personal finance, chances are that you’ve heard the term Adjusted Gross Income (AGI). A fair bit of tax considerations are based on AGI, so it’s well worth familiarizing yourself with the term. Here’s a quick introduction to AGI and when you might need to consider yours.

Calculating Adjusted Gross Income

The IRS defines AGI as “gross income minus adjustments to income.” That’s not exactly a helpful definition. It doesn’t tell you what gross income is or what adjustments must be subtracted.

Your gross income is simply the total amount you receive in a given year. It is not limited to wages or salary. It includes wages, salary, bonuses, dividends, royalties, interest, business income, pensions and annuities, capital gains, and alimony you’ve received.

Turning to adjustments, here’s a brief list and description of common adjustments accounted for in your AGI:

  • Certain expenses incurred by performing artists
  • Certain expenses paid by teachers for books, supplies, and other equipment
  • Certain travel expenses paid by members of the reserve components of the armed forces
  • Losses from the sale or exchange of property
  • Some costs associated with rental income or royalties
  • Qualified retirement savings
  • Alimony
  • Jury duty pay remitted to your employer
  • Clean fuel vehicle deductions
  • Moving expenses
  • Student loan interest
  • Higher education expenses
  • Health savings accounts

Why AGI Matters

Why does your AGI matter? Well, the IRS uses your AGI to determine whether or not you qualify for certain deductions and credits. For example, the IRS allows you to deduct medical expenses that exceed 7.5% of your adjusted gross income. In another example, qualifying for the Earned Income Tax Credit means falling under the income limit that applies to you, and all are based on adjusted gross income.

There’s yet another term you might hear thrown about, one used for a few other tax calculations: Modified Adjusted Gross Income (MAGI). MAGI refers to your AGI with modifications. What these modifications are can vary and the tricky thing is that there’s not a single MAGI—there are various MAGIs used for different purposes. And each comes with its own set of modifications. A few common modifications include tax exempt interest and the excluded portion of Social Security payments.

You should be cognizant of what you expect your AGI to be at the end of the year, particularly if you receive income throughout the year that you do not initially pay taxes on. Knowing what you AGI will turn out to be will help you plan for the coming tax bill. If your tax situation is simple, this probably won’t require much attention. If you and your spouse are both income earners, your AGI will be roughly the sum of your salary less retirement savings.

If, on the other hand, you work an income earning job, pay alimony, run a small business part time and own a rental property, it’s a good idea to think ahead about what your expected AGI is. This will help you know your marginal tax bracket and plan for tax expenses. The last thing you want is unexpected tax bill you can’t pay.Your adjusted gross income is one of the most important figures to know for tax time. Find out how to calculate yours and how it could affect your taxes.

The post What is Adjusted Gross Income (AGI)? appeared first on The Dough Roller.



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