thedrifter
03-08-09, 06:57 AM
Stimulus act adds new tax benefits for troops
By Erik Slavin, Stars and Stripes
Pacific edition, Monday, March 9, 2009
The American Reinvestment and Recovery Act of 2009, signed by President Barack Obama last month, includes new tax breaks that will benefit some servicemembers, financial professionals at bases in Japan said last week.
Along with the new deductions, there are several old deductions that benefit military members, especially if they itemize.
One of the biggest tax provisions in the Recovery Act economic stimulus plan allows anyone who purchases a home between Jan. 1 and Nov. 30 to take an $8,000 tax credit. The home has to be where you plan to live, said Jim McDaniel, an accredited financial counselor at the Yokota Air Base Airman and Family Readiness Center.
"However, it is more difficult to qualify for a home loan," said McDaniel, alluding to tightened credit standards at many banks across the United States. "But if you do qualify, there are a lot of opportunities in real estate."
Servicemembers and others with families also should get a boost from the Recovery Act’s expansion of the Child Tax Credit, according to a statement provided by H&R Block’s Yokosuka Naval Base office.
Families now begin qualifying for the credit with every dollar earned over $3,000; in 2008, the credit began at $8,500. Parents can claim up to $1,000 for each child under 17.
"If the person has no tax liability, the [Child Tax Credit] is issued in the form of a refund," according to the statement.
The Recovery Act also lets the Earned Income Credit apply to three or more children; previously, it was capped at two children. And married couples now qualify for the credit faster than before, though total eligible income varies based on individual cases.
"That’s good news for married couples, regardless of the number of children they have," the statement said.
Several older tax code provisions relate to servicemembers and civilians based overseas.
Defense Department personnel who moved overseas in 2008 can deduct moving expenses not reimbursed by the government, according to Mark Steber at Jackson Hewitt’s Web site.
Military uniforms also are deductible under some circumstances, Steber wrote.
"The cost of uniforms (and their maintenance) is generally deductible if your base restricts wearing them when off-duty and if these costs exceed your uniform allowance," Steber wrote.
Professional societies related to a military position are deductible; however, this does not include base club memberships, Steber wrote.
Also, servicemembers who deploy to combat zones can have their non-taxable combat pay recognized as earned income toward their Individual Retirement Account contribution cap.
For more tax deduction information, bases around the world have opened free tax preparation centers for servicemembers and eligible civilian personnel. Some bases also have commercial services available.
Ellie
By Erik Slavin, Stars and Stripes
Pacific edition, Monday, March 9, 2009
The American Reinvestment and Recovery Act of 2009, signed by President Barack Obama last month, includes new tax breaks that will benefit some servicemembers, financial professionals at bases in Japan said last week.
Along with the new deductions, there are several old deductions that benefit military members, especially if they itemize.
One of the biggest tax provisions in the Recovery Act economic stimulus plan allows anyone who purchases a home between Jan. 1 and Nov. 30 to take an $8,000 tax credit. The home has to be where you plan to live, said Jim McDaniel, an accredited financial counselor at the Yokota Air Base Airman and Family Readiness Center.
"However, it is more difficult to qualify for a home loan," said McDaniel, alluding to tightened credit standards at many banks across the United States. "But if you do qualify, there are a lot of opportunities in real estate."
Servicemembers and others with families also should get a boost from the Recovery Act’s expansion of the Child Tax Credit, according to a statement provided by H&R Block’s Yokosuka Naval Base office.
Families now begin qualifying for the credit with every dollar earned over $3,000; in 2008, the credit began at $8,500. Parents can claim up to $1,000 for each child under 17.
"If the person has no tax liability, the [Child Tax Credit] is issued in the form of a refund," according to the statement.
The Recovery Act also lets the Earned Income Credit apply to three or more children; previously, it was capped at two children. And married couples now qualify for the credit faster than before, though total eligible income varies based on individual cases.
"That’s good news for married couples, regardless of the number of children they have," the statement said.
Several older tax code provisions relate to servicemembers and civilians based overseas.
Defense Department personnel who moved overseas in 2008 can deduct moving expenses not reimbursed by the government, according to Mark Steber at Jackson Hewitt’s Web site.
Military uniforms also are deductible under some circumstances, Steber wrote.
"The cost of uniforms (and their maintenance) is generally deductible if your base restricts wearing them when off-duty and if these costs exceed your uniform allowance," Steber wrote.
Professional societies related to a military position are deductible; however, this does not include base club memberships, Steber wrote.
Also, servicemembers who deploy to combat zones can have their non-taxable combat pay recognized as earned income toward their Individual Retirement Account contribution cap.
For more tax deduction information, bases around the world have opened free tax preparation centers for servicemembers and eligible civilian personnel. Some bases also have commercial services available.
Ellie