Tax Credits for Retirement Savings It is a well-known fact that Americans are miserable failures when it comes to saving for retirement. Well, the government is offering tax credits to change this for some of us. Tax Credits for Retirement Savings Social security is going to be under siege as baby boomers hit retirements. Fortunately, many baby boomers have put away piles of cash in 401ks and IRAs. Regardless, most people fail to do all they can in this regard. In an attempt to motivate us taxpayers to save as much as we can for retirement, Uncle Sam is dangling tax credits before us like the proverbial carrot. The tax credit in question is the Retirement Savings Contributions Credit. Qualify for it and you may be eligible to take a credit of $1,000 for singles and $2,000 if you're filing jointly. The credit is eligible for those that make contributions to 401ks and retirement vehicles. The amount of the credit is determined on a sliding scale based on how much you make and contribute. You can claim the retirement savings tax credit: 1. Individual taxpayers with incomes of $25,000 or less. 2. Individual taxpayers that are head of households and make $37,500 or less. 3. Married couples filing jointly who make $50,000 or less cumulatively. There are some very minor restrictions regarding who is eligible for the tax credit. First, you have to be older than 18. Second, you can't be a full time student. Finally, another dependent can't claim you as a dependent on their tax returns. Importantly, this tax credit is in addition to other tax advantages you gain from piling money into a retirement account. With a 401k, for instance, you can pound in pre-tax earnings, which cuts down your adjusted gross income for the tax year. Once you figure out your taxes, you can then deduct another $1,000 or so for the tax credit. Put another way, saving for your retirement is a no brainer. The federal government is practically begging you to put away money for retirement. With this tax credit, there is absolutely no reason to fail to comply. Richard A. Chapo is with BusinessTaxRecovery.com - providing information on tax and taxes. Visit us to read more tax articles and our new tax credits page. Tax  Net Inc, the parent company of “the Home Based Tax Preparer”, has developed a system where qualified professionals can work at home and provide better service at a lower price to the consumer. Tax Net Inc and all the divisions are proud members of the Better Business Bureau of Denver/Boulder, Colorado.    There are three divisions of the Home Based Tax Preparer. CPA Moms/Dads Tax Moms/Mr Tax Moms Next Day Tax Cash  Regulatory and Disclosure Information for the following web sites: www.cpamoms.com www.cpadads.com www.taxmoms.com www.asktaxmoms.com www.askcpamoms.com www.nextdaytaxcash.com We do not render or offer to render personalized investment advice, financial planning advice, tax planning, or tax preparation through this medium. This medium is limited to providing you with general information about services and provides a way for you to contact us. The information in this web-site is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, and does not purport to be complete and is not intended as the primary basis for investment or tax decisions. It should also not be construed as advice meeting the particular investment needs of any investor.  Any tax information communicated, shared, faxed or emailed to Tax Net Inc or any of their divisions is held in strict confidentiality.   This information is not used, sold or shared with any other business entity or individuals.