Is your income under $27,750 if you are single or $55,500 if you are married filing jointly? Do you save at least $2000 a year in a 401(k), Traditional IRA, or Roth IRA? If so, you are eligible for tax credit worth up to $1000! That is a free $1000 off your tax bill from the government just because you save for your own retirement!
According to this post, the Retirement Savings Contribution Credit is overlooked by millions of qualified people every year. That means millions of people are simply missing out on tax savings! Even though the credit is non-refundable, which means it can only take your bill down to zero, it’s still free money for low-income families that are saving for their own retirement.
My husband and I do not qualify for this credit now, but we did the first two years out of college. It would have taken our tax bill down to zero both of those years! I hope some of my readers can take advantage.
Great find Crystal! IRS has some hidden tax breaks like these for those who bother to look!
@Moneycone, I’ll have to give credit for the find to my husband who forwarded me the article, lol. But thanks!
This is a good post. I should have written about it a long time ago. Between this credit, the earned income credit for working, and education credits back when we went to graduate school, I think the IRS has paid us, not just zero taxes, but paid us to file our taxes in three of the last five years. For 2009, it was $900.
The secret is once you are semi-retired, go work part time for some “earnings”. In ’09 & 2010 we worked for the US Census. One arm of the US government paid us to drive around our neighborhood and verify address so the IRS could pay us some more money.
I never looked for these things, TaxAct just filled them in for me. The software is free and if you follow it out by Q&A it will cover all the deductions and credits.
Does anyone know if this will work for 2011? If so, then I am so going to put more money (or actually open) into a roth!
@James, you may was to look it up at IRS.gov, but I found this in reference to great tax deductions right now so it should be current.
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