Which of the Following Taxpayers Is Most Likely to Qualify

question 34

Multiple Choice

Which of the following taxpayers is most likely to qualify for the saver's credit?

• A)A low AGI taxpayer who does not contribute to any qualified retirement plan.
• B)A low AGI taxpayer who contributes to her employer's 401(k) plan.
• C)A high AGI self-employed taxpayer.
• D)A high AGI employee who does not contribute to any qualified retirement plan.To be eligible for the saver's credit a taxpayer must contribute to a qualified retirement plan (including IRAs) .Further,the credit is phased out completely for high AGI taxpayers.

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Definitions:

Age Test

A criteria used in various legal and financial contexts to determine eligibility based on an individual's age.

Alimony Payments

Payments made to a spouse or former spouse under a divorce or separation agreement, qualifying as deductible for the payer in certain cases.

Head of Household Status

A tax filing status available to unmarried taxpayers who provide more than half of the support for a qualifying dependent and meet other specific IRS criteria.

Earned Wages

Compensation received from employment, including salaries, wages, tips, and other forms of payment for services rendered.