When saving money for your retirement, there are several individual retirement account options that you can choose from. Some IRAs are tax-free while you contribute to them, though you will be expected to pay taxes on the money you receive from IRA distributions. If you have a Roth IRA, the contributions you make aren't tax-deductible, but you do have the advantage of not owing taxes on the money once you start taking distributions. Because Roth contributions are not deductible it's important you claim them properly when filing your federal taxes.
Fill out IRS Form 8880 to see if you qualify for the Retirement Savings Contributions Credit and how much the credit will be if you do qualify. This credit helps offset the taxes on IRA contributions for individuals who earn under a certain amount based on their fining status. As of 2011, this amount is $28,250 for individuals, $42,375 for the head of household or $56,500 for those who are married and filing jointly. You also must be over age 18 to qualify.Step 2
Enter the amount of any withdrawals you may have made from your Roth IRA account on line 15a of IRS Form 1040, 1040A or a similar tax form as appropriate to your filing situation. Enter the taxable amount that you have contributed on line 15b.Step 3
Enter the amount of your Retirement Savings Contribution Credit on line 50 of Form 1040 if you qualify for the credit. You cannot use a 1040EZ form to file your taxes if claiming this credit.Step 4
Fill out the remainder of the tax form using your employment, savings and non-IRA investment information according to the instructions of Form 1040 and any other tax forms you may require.Step 5
Attach Form 8880 to your copy of Form 1040 and mail it to the IRS along with any W-2 forms or other documentation you are required to send. If filing electronically, a digital version of this form will be included with your filing automatically by the tax preparation software used to file your taxes.
Born in West Virginia, Jack Gerard now lives in Kentucky. A writer and editor with more than 10 years of experience, he has written both articles and poetry for publication in magazines and online. A former nationally ranked sport fencer, Gerard also spent several years as a fencing coach and trainer.