Take Advantage of the Retirement Savers' Tax Credit

Find out whether you qualify for this break and reduce your tax bill.

Who qualifies for the Retirement Savers’ Tax Credit, and how much is it worth?

The Savers’ Credit is a frequently overlooked tax break that provides an extra incentive to contribute to a retirement-savings account, such as a traditional or Roth IRA, a 401(k), a 457, a 403(b) or the federal Thrift Savings Plan. In addition to any tax break you already get for contributing to a retirement plan -- say, tax-deductible IRA contributions or pretax contributions to a 401(k) or other plan -- you can also take a credit that can reduce your tax bill by up to $1,000.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.