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Tax Info
For those on active duty and for you parents who have kids in a combat zone.
Dear Mr. Melvin: Knowing of our shared concern for military families, I wanted to alert you to some of the many tax benefits for those serving our country. In this time of war, we should not forget how stressful everyday life can be, not only for our service members abroad, but also for the military families back home that have to pay the bills, get the kids to school, and manage a household. First and foremost, there are a number of special provisions to assist families that have a member serving in a combat zone. Military families can exclude from taxable income pay received by a family member while in the combat zone, or pay received while in a hospital for combat zone related injuries. Also, the IRS will suspend any collection, audit, or other enforcement action until 180 days after the service member leaves the combat zone. The IRS suggests that military families who are in one of these situations notify the agency of their special status by emailing the name, home address, date of birth, and date of deployment of the service member to combatzone@irs.gov. Another important change Congress passed last year ensures that families with someone serving in a combat zone are eligible for the earned income tax credit and the refundable child tax credit. Because of a glitch in the law, these hard-working families were actually penalized by their service and could not receive these important benefits. While this fix is only temporary, I believe that these two changes should be a permanent part of the law. Other important tax benefits military families should be aware of include: * An above-the-line deduction for Reservists and members of the National Guard for travel expenses associated with Reserve or Guard duties if more than 100 miles from home. * An automatic extension of filing deadlines for anyone serving in a combat zone. Taxpayers should mark in red "COMBAT ZONE" and the deployment date at the top of any return, and should mark and return any notices received from the IRS the same. * Up to a 10-year suspension of the normal five-year ownership and use test period so that military personnel on qualified official extended duty can still qualify for the $250,000 ($500,000 married filing jointly) exclusion of gain on the sale of a principal residence. * An increase in tax-free government payments to families of fallen servicemen and women. To learn more about these and many other benefits available to military families, please read Publication 3 at www.irs.gov, or feel free to contact me or my staff for a copy of this publication or other questions. Finally, I would like to tell you about an important change to the federal tax code that will benefit all Washingtonians who itemize their federal income tax returns. Last year, I led the fight to restore a sales tax deduction to the federal tax code. As a result, for the first time in nearly twenty years, Washington state taxpayers can deduct state and local sales taxes from their federal income tax returns. To learn more about the deduction and whether your family can take advantage of it, please visit my web site at cantwell.senate.gov. I am profoundly grateful for the service of America's military personnel and for they and their families have made in protecting our country and our freedoms. We have an important responsibility to ensure that men and women in uniform and their families are provided the benefits and assistance that they have earned and so greatly deserve. Promoting greater fairness in our federal tax system is just one way I believe we can recognize their service. If you have any questions about any of these tax services, please feel free to contact me or my staff. Sincerely, Maria Cantwell United States Senator
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A government big enough to give you everything you want, is strong enough to take everything you have. ~Thomas Jefferson Peace,Griz |
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