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You
may be able to deduct some or all of your contributions
to your IRA. You may also be eligible for the Savers Credit
formally known as the Retirement Savings Contributions Credit.
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Contributions
can be made to your traditional IRA at any time during the
year or by the due date for filing your return for that
year, not including extensions. For most people, this means
contributions for 2009 must be made by April 15, 2010. Additionally,
if you make a contribution between Jan. 1 and April 15,
you should designate the year targeted for that contribution.
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The
funds in your IRA are generally not taxed until you receive
distributions from that IRA.
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Use the
worksheets in the instructions for either Form 1040A or Form
1040 to figure your deduction for IRA contributions.
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For 2009, the
most that can be contributed to your traditional IRA is
generally the smaller of the following amounts: $5,000 or
$6,000 for taxpayers who are 50 or older or the amount of
your taxable compensation for the year
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Use Form
8880, Credit for Qualified Retirement Savings Contributions,
to determine whether you are also eligible for a tax credit
equal to a percentage of your contribution.
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You must
use either Form 1040A or Form 1040 to claim the Credit for
Qualified Retirement Savings Contribution or if you deduct
an IRA contribution.
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You must
be under age 70 1/2 at the end of the tax year in order to
contribute to a traditional IRA.
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You must have
taxable compensation, such as wages, salaries, commissions,
tips, bonuses, or net income from self-employment to contribute
to an IRA. If you file a joint return, generally only one
of you needs to have taxable compensation. |