When life gives you lemons, make lemonade. Many families in America have seen their income drop significantly in 2009. That means that they may be eligible for programs they are not familiar with, such as the Saver's Credit. Since April 15th is fast approaching, time is running out to take advantage of this for 2009.
IRAHelp.com has a solid description of the credit. IRS Publication 8880 is the worksheet. The basic structure is that people who don't make a lot of money, yet contribute to an IRA, can get a tax refund bonus. That bonus ranges from 10-50% of the contribution, depending on income levels.
The Road to Hell is paved with good intentions, and the Saver's Credit is no different. For 2009, the income levels and credit rates are as follows:
Credit Rate | Married Filing Jointly | Head of Household | Single |
---|
50% | $33000 | $24750 | $16500 |
20% | $36000 | $27000 | $18000 |
10% | $55500 | $41625 | $27750 |
Most people who are eligible to claim this credit will be too swamped with bills to contribute to an IRA. However, should you know someone who qualifies for this credit, an IRA contribution backdated to 2009 would make a wonderful gift. Not many investments give such a high return with no risk and in such a short timeframe.
Combine this with the Move your Money movement, and you have a huge list of benefits:
Fast resolution
Guaranteed return
Economic stimulus of money kept at Main Street
Retirement savings
Community investment, starving TARP Babies and Too Big To Fails