Low Income? You May Qualify For Tax Saver's Credit

If you’re single and earned less than 26,000 last year, or married and together made less than $52,000, then you can qualify for a tax credit of up to $1000 if you contributed to a retirement savings account during the year. To get the maximum credit, you’ll need to have socked away $2,000 and earned less than $15,500 as a single tax filer ($31,000 if married). And yes, this is a credit, not a deduction (something this writer has confused in the past), so it can make a significant difference on your final tax bill.

If you’ve earned too much in 2007 to qualify but had some lean years prior to that, there’s still time to claim the credit:

If you discover that you’ve missed any of these tax breaks in past, you can file an amended return to retroactively claim your savings and get an extra refund. You have up to three years after the original due date of your return to file an amended return — use Form 1040X.

“Qualifying for the Tax Saver’s Credit” [Kiplinger]
(Photo: david.nikonvscanon)