No. of Recommendations: 0
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.

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.