If you are currently serving in the military, you should take a moment and educate yourself about the Military Family Tax Relief Act. Whether you owe back taxes to the IRS, or are in good financial shape, you should know how the law affects you. Here are a few things you should know about the program.
- It was signed into legislation in November 2003 by President Bush
- If you own a home, you can suspend (up to 10 years) the running of the five year ownership and use the period before the sale of a residence.
- If you are in the Army Reserves or Army National Guard and travel more than 100 miles to your unit, you may deduct non-reimbursed travel expenses to include transportation, meals and lodging. Make sure you keep records of these expenses so you can input this information on Form 1040 when you do your income taxes.
- Payments made after Nov. 11, 2003, under this program to offset the adverse effects on housing values of military base realignments or closures will be excludable from income as a fringe benefit.
- If you served in a combat zone or in a contingency operation, as designated by the SEC DEF, you will be eligible for certain tax filing extensions. Talk with a tax professional to find out how this works.
- Clarifies that dependent care assistance programs for military personnel are excludable benefits. Effective for tax years after 2002.
- The ten percent tax on payments from a Qualified Tuition Program or Coverdell Education Savings Account that are not used for educational expenses does not apply to attendees of the U.S. Military, Naval, Air Force, Coast Guard or Merchant Marine Academies, to the extent the payments do not exceed the costs of advanced education. Effective for tax years after 2002.
Once again, this is just a brief summary of the Military Family Tax Relief Act. I have not covered EVERYTHING in the Act, nor am I a licensed attorney or CPA. If you have a specific question, make sure you talk to a qualified individual. My only goal today was to provide you an overview of what is in the legislation.
My advice to you is to:
1) Read the Law: Print out the Military Tax Relief Act and read it, so you know what pertains to you (or might in the future) and what doesn’t.
2) Consult with JAG or S1: If you have questions, consult with a licensed professional. Start with your S1 or JAG. If they can’t help you out, consider consulting with a CPA or licensed attorney.