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Investing/Strategies / Retirement Investing
|Subject: Re: RE: Tax Credit||Date: 7/31/2001 2:22 PM|
|Author: TMFPixy||Number: 31071 of 77407|
Greetings, Jo63, and welcome. You asked:
Just enjoyed reading your article on the Tax Credit for IRA and/or Roth IRA contributions. Although my total income is usually over $30,000 my AGI turns out to be around $600. Csn I take the credit against this tax bill? I'll assume yes, then will the excess credit be allowed toward the refund? I think not.
I note from your profile that you are retired. Therefore, you may or may not be employed by others or by yourself. If you do have job income, then you may make a contribution to a Roth IRA regardless of age and to a traditional IRA when you are younger than age 70 1/2. If you do not have earned income through a job, then you may not make a contribution to an IRA or to a qualified retirement plan. In the latter case, you would not be eligible for the credit at all. In the former, you would be.
Assuming you are eligible to make an IRA contribution, then you are also eligible to take the credit based on your stated income. In that case, the credit may be applied to your tax bill. If your tax bill is less than the credit you are entitled to, you may only bring your tax bill down to zero. You will not receive a refund based on the credit, so any unused portion would remain unused.
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