401(k) Plan Notice - Get the “CREDIT” you deserve!
You may be eligible for a valuable incentive, which could reduce your federal income tax liability, for contributing to your
company’s 401(k) or 403(b) plan. If you qualify, you may receive a Tax Saver’s Credit of up to $1,000 ($2,000 for
married couples) if you made eligible contributions to an employer sponsored retirement savings plan. The
deduction is claimed in the form of a non-refundable tax credit, ranging from 10% to 50% of your annual contribution.
Remember, when you contribute a portion of each paycheck into the plan on a pre-tax basis, you are reducing the
amount of your income subject to federal taxation. And, those assets grow tax-deferred until you receive a distribution.
If you qualify for the Tax Saver’s Credit, you may even further reduce your taxes.
Your eligibility depends on your Adjusted Gross Income (AGI), your tax filing status, and your retirement contributions.
To qualify for the credit, you must be age 18 or older and cannot be a full-time student or claimed as a dependent on
someone else’s tax return.
Use this chart to calculate your credit for the tax year 2012. First, determine your Adjusted Gross Income (AGI) – your
total income minus all qualified deductions. Then refer to the chart below to see how much you can claim as a tax credit
if you qualify.
Filing Status/Adjusted Gross Income for 2012
Amount of Credit
Joint
Head of Household
Single/Others
50% of first $2,000 deferred
$0 to $34,500
$0 to $25,875
$0 to $17,250
20% of first $2,000 deferred
$34,501 to $37,500
$25,876 to $28,125
$17,251 to $18,750
10% of first $2,000 deferred
$37,501 to $57,500
$28,126 to $43,125
$18,751 to $28,750
Source: IRS Form 8880
For example:

A single employee whose AGI is $18,000 defers $2,000 to their 401(k) plan will qualify for a tax credit equal to
20% of total contribution. That’s a tax savings of $400.

A married couple, filing jointly, with a combined AGI of $30,000 each contributes $1,000 to their respective
company plans, for a total contribution of $2,000. They will receive a 50% credit reducing their tax bill by
$1,000.
With the Tax Saver’s Credit, you may owe less in federal taxes the next time you file by contributing to your retirement
plan today!
Best regards,
Sean L. McCarty, AIF®
Larry M. McCarty, CPA AIF®
Financial Advisor
DIVERSIFIED INVESTMENT SERVICES, INC.
180 North Riverview Dr., Ste 220
Anaheim Hills, CA 92808
email: smccarty@disinc.net
phone: (714) 974-4500 X224
fax:
(714) 974-7943
Skype: dis.seanmccarty
Financial Advisor
DIVERSIFIED INVESTMENT SERVICES, INC.
180 North Riverview Dr., Ste 220
Anaheim Hills, CA 92808
email: lmccarty@disinc.net
phone: (714) 974-4500 X215
fax:
(714) 974-7943
Skype: dis.larrymccarty
A referral is the greatest compliment I can receive.
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an investment, or making a deposit or withdrawal from your account. Instead, please telephone our office and speak with
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This message is confidential and intended for the private use of the recipient. If you are not the intended recipient, please
delete this message and inform me of this transmission error. Larry McCarty (CA Insurance License # 0B16131) and Sean
McCarty are Registered Representatives and Investment Adviser Representatives with/and Offer Securities and Advisory
Services through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser.
Diversified Investment Services does not provide legal or tax advice. You should consult a legal or tax professional
regarding your individual situation.
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