Many taxpayers may be eligible to reduce the amount they owe the government by $1,000, when they file their federal income taxes this year. All they have to do is add money to their retirement fund.
Whether you have a 401(k), traditional IRA or Roth IRA, you can qualify to save up to $1,000 on your tax bill. To earn the full $1,000 you must add $2,000 or more to your retirement fund. You can still get partial credit if you cannot invest $2,000, according to U.S. News and World Report.
However, taxpayers should note that their income will determine if they qualify for the Savers Credit. If you file as single, you cannot make more than $27,750 during 2010. Married couples who are filing together must make $55,500 or less.
The Savers Credit was created to help taxpayers who live paycheck-to-paycheck invest in their retirement account, the news source reported.
Since the deadline to file your income taxes has been moved to April 18, taxpayers will have an extra three days to claim the Savers Credit.