Wednesday, November 19, 2008

Overlooked Deployment Benefits

As is my normal routine at this time of year, I have begun planning for my tax return and looking at end of year tax moves. In the process of reviewing tax changes that have occurred since I deployed, I realized that there are a number of benefits related to the "tax free income" aspect of being in a Combat Exclusion Zone. This is something they do not brief us on as we redeploy, and it is something I think troops should at least be aware of.

If you are or have been deployed for a good portion of 2008, chances are you may well qualify for several of these tax goodies - check the IRS page for military members.

One item I would like to highlight here, which is not addressed (as far as I could see) is the Savers Credit. It is not really a military benefit per se, but it is a way to get Uncle Sam to pay half of your contribution to your IRA or Roth IRA. As long as your taxable income is below $15,500 for single Soldiers or $31,000 married filing jointly (2007's limit) you can get a tax credit for 50% of your contribution to an IRA, which is much better than what most employers are offering these days. These limits are normally too low for anyone over E2, but being deployed can quickly change that. You can still get some credit up until your income hits $26,000 single or $52,000 married. A lot of deployed Soldiers end up saving a lot and blowing it on a bike or a car - consider taking 2,000 to 4,000 of that and putting it in an IRA. On tax day you would then get half of that back in your tax return (assuming you don't owe taxes for other reasons.) Plus with the stock market down so much, you probably are getting a deal.
Disclaimer: I am no tax professional and this is not tax advice. Do your own research at IRS.gov

1 comments:

"D" AKA CI-Roller Dude said...

I hate taxes...the only thing I really liked about my deployments was not having to pay them. I wouldn't mind if the state and feds spent the money well, but they waste so much of it.
My friggen overtime check is taxed at about 50%...
I"m going to retire, move into the hills and smoke weed.