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Wilmington, DE (PRWEB) November 20, 2012
If you receive tax-free combat pay, you can include it as earned income:
- When determining the Earned Income Credit (EIC)
- When determining the additional child tax credit
- For purposes of making an IRA contribution
- Other Excludable Income
Even if you received the income as a reimbursement or an allowance, you don’t include this income in your gross income:
- Basic Allowance for Housing — However, you can deduct mortgage interest and real-estate taxes on your home even if you pay these expenses with your basic allowance for housing.
- Basic allowance for subsistence
- Housing and cost-of-living allowances abroad, whether paid by the U.S. government or by a foreign government
- Overseas Housing Allowance
- Certain educational expenses for dependents
- Evacuation to a place of safety
- Burial services
- Death gratuity payments to eligible survivors
- Travel of dependents to burial site
- Moving Allowances
- Move-in housing
- Moving household and personal items
- Moving trailers or mobile homes
- Temporary lodging and temporary lodging expenses
- Military base realignment and closure benefit
For the military base realignment and closure benefit, the excludable amount can´t be more than this equation:
95% of the fair market value of the property for which the payments were made (before public announcement of intent to close all or part of the military base or installation) – Property´s fair market value (at the time of sale) = Maximum military base realignment and closure benefit exclusion
The Department of Defense determines:
- 95% of the fair market value of the property for which the payments were made – before the public announcement of intent to close all or part of the military base or installation
- Property´s fair market value at the time of sale
- Annual round trip for dependent students
- Leave between consecutive overseas tours
- Reassignment in a dependent-restricted status
- Transportation for you or your dependents during ship overhaul or inactivation
- You can deduct your travel expenses as an adjustment to income on Form 1040 rather than as a miscellaneous itemized deduction if both of these apply:
- You´re a member of the reserves.
- You travel more than 100 miles away from home in connection with your duties.
- Defense counseling
- Disability, including payments received for injuries incurred as a direct result of a terrorist or military action
- Group-term life insurance
- Professional education
- ROTC educational and subsistence allowances
- Survivor and retirement-protection plan premiums
- Uniform allowances
- Uniforms furnished to enlisted personnel
In-kind Military Benefits
- Dependent-care assistance
- Legal assistance
- Space-available travel on government aircraft
- Medical and dental care
- Commissary and exchange discounts
You can’t exclude the value of personal use of a government-provided vehicle.
We provide personalized tax services tailored to Your individual needs. Our team of CPAs and tax experts will help you make informed decisions and help you plan ahead.
All people are unique and so is your tax return. You will receive individual attention when you contact us or come into our office. Our CPAs, tax experts and preparers will ensure that you receive every deduction and credit that you are entitled to.
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