Debbie files as head of household and has AGI of $36,500.During the year,she contributed $1,000 to a 401(k).What amount of retirement savings contributions credit can Debbie take?
A)$0.
B)$100.
C)$200.
D)$1,000.

Question

Quizplus · Accepted Answer

The retirement savings contributions credit is designed for lower to middle-income taxpayers who make contributions to qualified retirement accounts, like a 401(k). The credit amount is a percentage of the qualifying contribution amount, based on the filer's adjusted gross income (AGI). Given Debbie's AGI of $36,500 and her filing status as head of household, she falls within the income range that allows for a 10% credit rate on her $1,000 contribution to a 401(k), which equals a $100 credit.

Debbie Files as Head of Household and Has AGI of $36,500.During