Legal offers retirment contribution tax tip

Laughlin AFB, Texas -- Are you aware of the "Retirement Savings Contributions Credit?" This tax credit may be available to you if you voluntarily put money aside for your retirement in a number of different accounts or plans including: contributions (not including rollover contributions) to a traditional or Roth IRA, elective deferrals to a 401(k) and voluntary contributions made to a federal Thrift Savings Plan. These savings contributions must be made before the due date (including extensions) of your 2006 tax return.

Qualified individuals may be entitled to a credit of up to 50 percent of the amount contributed to a qualified retirement plan, up to a maximum of $1,000 ($2,000 if married filing joint). The amount of the credit will depend on your adjusted gross income (AGI), the amount contributed to a qualified retirement plan, your tax liability and your other credits. The credit is generally not available for single filers with an AGI greater than $25,000 or married filers with an AGI greater than $50,000. Also keep in mind that this credit can only lower your tax liability, any amount available under this credit that places you into a situation of negative tax liability will not be refunded.

To claim the credit, you must file IRS Form 8880. Note: If you use the free online tax preparation software, H&R Block TaxCut Basic Online, available at, this credit is referred to as the "Saver's Credit."

More information about the Credit for Retirement Contributions can be found in the instructions to IRS Form 8880 available at and in Publication 590 available at