Saver?s Credit: Get a Larger Tax Refund

Do you have a low to moderate income and still put cash
away into a retirement account? Would you like a bigger tax
refund check? If you answered yes to both questions, you
may be eligible for Credit for Retirement Savings
Contributions, also known as Saver's Tax Credit. Saver's
Tax Credit began in 2002 to award low to moderate income
people for saving for their futures in either a personal
IRA or a work related retirement plan such as a 401 k. How
do I claim the credit if I am eligible? In order to claim
the credit, you have to meet the following criteria:

? You are age 18 or older

? You are not a full time student (Note: Many institutions
have different definitions of "full time").

? You are not a dependent on someone else's taxes

? Your adjusted gross income (AGI) must not be greater than
the following limits: AGI is used to determine how much of
your income is taxable. AGI consists of your gross income
minus your maximum allowable adjustments.

o $26,000 for a single filer

o $39,000 as a head of the household

o $52,000 if you are married and files a joint return

Example: Bill is a part-time student at a community college
and earns $13,000 working at a pizza place and shares an
apartment with two roommates. Bill is 21 years old and
opened up an IRA account. He had contributed $800 to his
IRA in the 2006 tax year. Since Bill made under $26,000,
he is eligible to get a $400 tax credit (50% of his total
$800 contributed)

Credit Rates for total income: (Married and files a joint
return)

50%: Up to $31,000

20%: $31,001-$34,000

10%: $34,001-$52,000

0%: $52,000 +

Credit Rates for total income: (Files as head of household)

50%: Up to $23,250

20%: $23,251-$25,500

10%: $25,501-$39,000

0%: $39,000+

Credit Rates for total income: (Other category of filers)

50%: Up to $15,500

20%: $15,501-$17,000

10%: $17,001-$26,000

0%: $26,000+

CHART: Investopedia.com

If you think you meet all the criteria listed above,
contact your tax professional and advise them. According to
an article on Sun-Sentinel.com, you do not have to be a tax
expert to get these credits. If your income is below
$39,000, you are eligible for free tax help in one of
12,000 centers across the country. These centers are known
as Volunteer Income Tax Assistance programs, also called
VITA. You can find one near you by calling 800-829-1040 or
visit
http://www.irs.gov/individuals/article/0,,id=107626,00.html
on the web. Seniors can get special help by calling
888-227-7669.

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Pete Glocker is employed in the Education and Charitable
Services Department at Debt Management Credit Counseling
Corp. (?DMCC?), a 501 c(3) non-profit charitable
organization located in Boca Raton, Florida. Pete graduated
from Florida Atlantic University with a BA in Multimedia
Journalism and was a web producer Intern for Tribune
Interactive products Sun-Sentinel.com and SouthFlorida.com.
DMCC provides free financial education and personal budget
counseling to consumers across the United States. DMCC
financial counselors can be reached for free education
materials and budget counseling by calling 866-618-DEBT or
by visiting http://www.dmcccorp.org . Pete Glocker can be
reached by email at pete@dmcccorp.org.