IRS to Hold Open House Sept. 25 for Veterans and Persons with Disabilities

In their newest press release the Internal Revenue Service announced a nationwide open house to be held on September 25 to help veterans and taxpayers with disabilities solve tax problems and respond to IRS notices.

One hundred offices, at least one in every state, will be open from 9 a.m. to 2 p.m. local time. IRS staff will be available on site or by telephone to help taxpayers work through issues and leave with solutions.

In many locations, the IRS will partner with organizations that serve veterans and the disabled to offer additional help and information to people in these communities. Partner organizations include the National Disability Institute (NDI), Vets First, Department of Veterans Affairs, National Council on Independent Living and the American Legion.

“Taxpayers have tremendous success solving their tax issues at our open houses,” IRS Commissioner Doug Shulman said. “I want to encourage veterans and people with disabilities to come in on Sept. 25. Just like we reached out earlier this year to small businesses and victims of the Gulf Oil Spill, we want to help other taxpayers put their toughest problems behind them.”

IRS locations will be equipped to handle issues involving notices and payments, return preparation, audits and a variety of other issues. At a previous IRS open house on June 5, over 6,700 taxpayers sought and received assistance and 96 percent had their issues resolved the same day.

At the Sept. 25 open house, anyone who has a tax question or has received a notice can speak with an IRS employee to get an answer to their question or a clear explanation of what is necessary to satisfy the request. A taxpayer who cannot pay a balance due can find out whether an installment agreement is appropriate and, if so, fill out the paperwork then and there. Assistance with offers-in-compromise — an agreement between a taxpayer and the IRS that settles the taxpayer’s debt for less than the full amount owed — will also be available. Likewise, a taxpayer struggling to complete a certain IRS form or schedule can work directly with IRS staff to get the job done.

Veterans And Taxes

My YouTube team shot another great tax tips video. In this new episode, host Edward Lester offers tax tips for Veterans. Check out the embedded video below, and be sure to check out my YouTube channel to see all of my other useful tax videos, and subscribe to stay updated on future videos.

Tax Issues for Active Members of the Military

Joining a division of the United States military is a major life decision. Active members of the military face a lot of different challenges than the average American, including a specific set of tax laws, deductions, and credits. Luckily, much of the confusion surrounding military taxes is based on rumors and misconceptions. To help any of my readers serving our country I have put together the following article explaining taxes for members of the military.

180-Day Rule

Despite what many believe, military personnel are not required to file their tax returns while away on duty. If you are married filing separately, your spouse will not need to worry about filing a tax return on your behalf either. However if you file a joint return, then your spouse – with a power of attorney – will need to file a return before the standard April 15^th deadline. Once you return home, you can apply for an automatic extension of up to 180 days. This extension applies to filing your return, paying your taxes, contributing to IRA's and making claims for a refund.

Combat Pay

Some members of the military fear they will be unable to pay their taxes while away for combat. Fortunately, active members of the military serving in a combat zone get the special privilege of not having to pay Federal income taxes on any income made during that time. For officers, there is a cap at the highest rate of enlisted pay, as well as any hostile fire or imminent danger pay received. Since having tax-free income is so rare, the IRS encourages members with such an opportunity to contribute the money to an IRA or tax friendly savings account.

Travel Expenses

Military personnel often need to travel to fulfill their duties. If you have to travel more than 100 miles to perform any reserve duties, all un-reimbursed travel expenses can be deducted from your taxable income. If you need to permanently re-locate stations the IRS will even allow you to deduct reasonable un-reimbursed moving expenses. Likewise, certain job search and travel expenses are deductible.

Call to Duty Penalties

Some active members of the military will sacrifice a significant portion of their earning in leaving their regular jobs to serve in the military. If you are in this situation and are forced to withdraw funds from a retirement account, then the IRS will frequently waive the associated penalty. However, this can be a tricky situation and I recommend speaking with a tax professional experienced with military taxes before making any withdrawals.

Military Academy Costs

Members of the military who received payments from a Coverdell Education Savings Account or Qualified Tuition Program are exempt from the 10% tax on funds not used for educational expenses. However this is only so long as they are attending a U.S. Military, Naval, Air Force, Coast Guard or a Merchant Marine Academy and the payments do not exceed advanced education costs.

Uniform Up-Keep Expenses

Some military officials are required to wear certain uniforms wherever they go, which can result in a hefty dry cleaning bill. Luckily, most members of the military can get these fees reimbursed or waived completely. However, if you are forced to pay for these fees out of pocket then you can deduct all of the costs.

Further Tax Complications

The U.S. tax code is complicated and difficult to understand, especially for active members of the military. Fortunately, most personnel qualify for free tax assistance from VITA (Volunteer Income Tax Assistance Program). The program utilizes volunteers trained by the IRS who provide free tax help to members of the military. These services are usually available on base or in your local area. For more information on military tax issues be sure to check out IRS Publication 3.

Questions for the Tax Lady: November 16th, 2009

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: Are Veterans exempt from paying property taxes?

Answer: It depends. There are a handful of different property tax exemptions available to Veterans – including the Veterans' Real Property Tax Exemption, the Cold War Veterans Exemption, and Alternative Veterans Exemption – which can exempt a Veteran from paying property taxes. However, some cities and county government agencies have opted out of the programs. To find out if you, or a Veteran you know, qualify for a property exemption then you should check with your local tax department. For more information on the topic, checkout this blog entry on the Tax Help Blog: Top 10 Tax Tips for Veterans.

Question #2: If I lose money on the sale of my property can I deduct it amount on my tax return?

No, losses from the sale of a personal residence cannot be used to reduce your taxable income. However, if the property was an investment and you did not live in it, then you may be able to claim a capital loss. Be sure to speak with a qualified tax professional before taking a capital loss deduction.

Happy Veterans Day

Happy Veterans Day! In honor of the brave servicemen and women who have fought for our Country, the Roni Deutch Tax Help Blog has posted a new entry with 10 tax tips for Veterans. You can find a section of the advice article below, but be sure to check out the full version here.

1. Keep Records

To qualify and receive most Veterans’ tax benefits, you will need to verify your status as a U.S. Veteran. Therefore, it is important to keep your records in a safe place with your other financial documents. If you do lose any of these records, you will need to contact the Department of Veterans Affairs to obtain new ones.

2. Know About Property Tax Exemptions

There are a few types of property tax exemptions available to Veterans. The first is the Veterans' Real Property Tax Exemption that allows a qualifying Vet to take a partial exemption for property purchased with eligible funds. The second is the Cold War Veterans Exemption, which exempts those who fought in the cold war from paying property taxes. However, some counties and cities have opted out of this program so be sure to check with your local tax department.

Last but not least, the alternative Veterans exemption is available to Veterans with residential property that have served during wartime and/or received an expeditionary medal. Similar to the Cold War Veterans Exemption, some local governments may opt out of offering this exemption. With any property tax exemptions you should always speak with a local tax professional to make sure you do not pay any taxes that you are not required to.

3. Taxes on Income and Retirement

Unfortunately, any income you receive from the military that is based on age or length of service is taxable income and must be included on your tax return. However, you will usually not have the standard taxes withheld from your checks like you would with a standard paycheck.

4. American Recovery and Reinvestment Act

The American Recovery and Reinvestment Act of 2009 provided some assistance to struggling families and businesses through the making work pay tax credit. However, the credit unfortunately created problems for many veterans. After it was enacted, the new law reduced the amount of money being taken out of American worker’s paychecks. Although Veterans are not eligible for the credit, they will still have fewer taxes withheld as part of the new “one-size-fits-all” IRS guidelines. Therefore, you may be surprised to find you owe a significant tax liability in April.

Returning Veterans Becoming Franchise Owners

According to US Franchise News, there is an increasing number of veterans returning from the Middle East who are looking to purchase small business franchises. Currently there are over 350 veterans who own a small business franchise in the United States as a result of the Veterans Franchise Initiative (VetFran), which offers discounted franchise fees to veterans who want to purchase a franchise business. The program was given the Support Sector Champion Award from the U.S. Department of Veteran Affairs at the nation’s capital. "The VetFran program is our way of saying thank you to veterans for their service," said Matthew Shay, president of the IFA. "They deserve our help in pursuing the American dream of business ownership because without them to protect our nation, such opportunities would not exist."

The Roni Deutch Tax Center is also a proud member of the VetFran program. To learn more about the special benefits we offer to veterans, please check out the Roni Deutch Tax Center Franchise website.