Still time to contribute to an IRA and save money on your taxes

You still have five days left to save money on your 2010 income taxes.

Generally you can deduct contributions made to a traditional Individual Retirement Arrangement (IRA) on line 32 of Form 1040. Do not confuse a Traditional IRA with a Roth IRA, contributions to a Roth IRA are never deducted as an adjustment to income.

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 2010 must be made by April 18, 2011. Additionally, if you make a contribution between Jan. 1 and April 18, you should designate the year targeted for that contribution. Use the IRA Deduction Worksheet to figure your deduction for IRA contributions.

A Reward for Saving

Taxpayers may be eligible for a Retirement Savers Credit of up to $1,000 ($2,000 for married couples filing together) for making eligible contributions to an:

• Employer-sponsored retirement plan such elective deferrals to a 401(k), 403(b), 457, SEP or SIMPLE plans
• Voluntary contributions to qualified retirement plans
• IRA