Sorry, hit the submit button a bit too early.Take advantage of an extremely under utilized tax credit if you are in a low income category or a part time worker. You need to contribute to a ROTH IRA, a Traditional IRA, 401k, 403b, 457, SIMPLE, or Sar-Sep.The credit is obtained by completig Line 48 on the 1040 and form 8880. The Government will give you up to a 50% tax credit on the first $2,000 you contribute to any of the above listed plans. So, if you qualify for the 50% credit and contribute $1,000 to a Traditional IRA, the Government will give you $500. This is in addition to the tax deduction you get for contributing, (Except the ROTH). More info can be found on Form 8880 at www.irs.govCredit Individual Joint Return50%................. $0-$15,000.................... $0-$30,00020%..................$15,001-$16,250............. $30,001-$32,50010%..................$16,251-$25,000............. $32,501-$50,0000%...................$25,001 or more............. $50,001 or moreBill
Take advantage of an extremely under utilized tax credit if you are in a low income category or a part time worker. You need to contribute to a ROTH IRA, a Traditional IRA, 401k, 403b, 457, SIMPLE, or Sar-Sep.I just printed this and will post it on my refrigerator for my daughter's benefit. She's just getting the hang of financial responsibility (at 23) but is not saving yet. I think the phrases "tax credit" and "free money" will now make an interesting conversation between us.THANKS A BUNCH!!Pat
Was this in effect last year too? I'm wondering if I should file an amended return. What are those numbers in the second and third columns?
Yes it was available in 2002. That was the first year for it.The numbers in the 2nd and 3rd column are the income qualifications.for instance if you are married and filing jointly, and your joint income is less than $50,000, you will qualify for a credit.If you are Single and your income is $25,000 or less you qualify for a credit. How much of a credit depends on how much you earned. For instance, those that are single and make $24,000 will receive a 10% credit. Those making under $15,000 will get a 50% credit,If anyone has kids and they worked over the summer, get them to contribute to an IRA,(it can be a traditional or a ROTH)They should get the tax credit if they just had a summer job.Bill
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