Many workers eligible for tax credit for retirement contributions

If the end of the year has you wishing you could contribute to your retirement account but you're not quite sure about putting money away for the future when you could need it now, there's a little incentive you might not know about to save now.

It's called the Retirement Savings Contributions Credit and it allows low- and moderate-income workers to get a tax credit.

If you file jointly with a spouse and make less than $53,000 in net income, are head of household and make less than $39,750, or are single and make less than $26,000, the saver's credit is for you.

The government's goal with the law is to help these workers save for retirement voluntarily by offsetting part of up to $2,000 deposited into Individual Retirement Plans or 401(k)s. Those with IRAs have until April 15 to contribute and still get the credit on 2008 taxes. Amounts contributed to 401(k)s are eligible only if the contribution is made by Dec. 31.

So even though you put away money for retirement, you'll get part of that back now when you calculate your taxes.

The Internal Revenue Service said it gave almost $900 million worth of these tax credits in 2006, the latest year numbers are available. Average credits were $213 for joint filers, $149 for head of household and $128 for singles. In addition, the contributions are deducted from income to lower taxes further.

Look for the line to claim the credit on the back of your tax form.

Just because you make less now is not a reason to put off saving.

Taxpayers can take advantage of this credit by budgeting their expenses to plan on having some money left over to put away for the future. The miracles of budgeting make all goals possible.