Get a tax credit for your IRA -- even a Roth!

Many people don't know that lower-to-middle income taxpayers can get a tax credit of 10% to as much as HALF of the money you put into an IRA.

Traditional IRAs are tax-deductible when you contribute (except for higher-income folks), but the Roth is not (instead, all withdrawals are tax-free, which generally makes it a better deal). But this is a completely separate tax credit, and it applies to either one! Let Uncle Sam pay you to save -- such a deal!

You have till April 17, 2006 to contribute for 2005 (and then of course till April 2007 to contribut for 2006, and so on). For 2005, you can contribute $4,000 (or $4,500 if you turned 50 or more in 2005), but only up to your total employment income for the year (note I said income from employment, not self-employment, and not investments, etc.). If you worked, your spouse can contribute too, even if he or she didn't work.

However, only $2,000 for each person is eligible for calculating the tax credit.

Just to make this clear: If you deposit $2,000 into an IRA, and meet the income qualifications, Uncle Sam will put between $200 and $1,000 straight into your pocket (depending on income) in the form of that tax credit. And your spouse can turn around and do the same.

So don't delay -- put that money to work for you. Don't depend on "Social Insecurity" to bail your out. Its financial problems are notorious, and there's basically nothing Congress can or will do that will rescue it enough to prevent benefits from being reduced and/or delayed in the future.

And don't forget that tax credit on Line 51 of that Form 1040. You get the full benefit if your your Adjusted Gross Income is less than $15,000 ($25,000 if married and filing jointly), and it phases out as income rises past $25,000 ($50,000 if married and filing jointly).