WASHINGTON: The American Recovery and Reinvestment Act of 2009 provides additional tax refunds for some servicemembers and their families.
Internal Revenue Service spokesman Mark Hanson shared tips, facts and recommendations to help Soldiers and families get the most back on their return as they file from both home stations and overseas.
“Soldiers should pay close attention to the American Recovery and Reinvestment Act that was passed last year,” said Hanson. “[There are] lots of new tax provisions that could impact their returns.”
More often called the “stimulus package,” the American Recovery and Reinvestment Act includes a first-time homebuyer credit, a “making-work pay” credit and a sales-tax deduction for new vehicles.
“If [Soldiers] purchased a new vehicle in 2009 they also may be able to deduct state and local sales and excise taxes they paid on that vehicle,” said Hanson.
Additionally, if Soldiers were deployed more than 90 days in 2009, they may be eligible for an extension on the first-time homebuyer credit, Hanson said.
To fully understand tax benefits, Hanson suggested downloading or ordering “Publication 3 – Armed Forces’ Tax Guide,” which is available on the IRS Web site at: www.irs.gov/pub/irs-pdf/p3.pdf.
“This will give [Soldiers] all the information they need for specific military information that could impact their taxes,” Hanson said.
How to file while deployed
Hanson recommended that all Soldiers, especially those deployed, use electronic filing.
“It’s fast, it’s accurate, and more than 70 percent of taxpayers use this method now and many can do it for free,” he said.
The IRS e-file is free for anyone that made less than $57,000 in 2009.
“For Soldiers deployed to combat environments, taxes may not be the first thing on their mind right now,” Hanson said. “Soldiers need to know that they can get an extension to file their taxes at least 180 days after they return from deployment.”
Hanson also recommends that Soldiers ensure that their combat pay is designated as tax-free income.
IRS quick tips
• Keep good records – save all receipts of major transactions.
• Download Publication 3 – Armed Forces Tax Guide at www.irs.gov/pub/irs-pdf/p3.pdf.
• When itemizing deductions – uniform cost may be eligible for a tax deduction.
• Look into the American Opportunity credit that is up to $2,500 in credit for higher education.
• Watch out for an e-mail scam claiming to be from the IRS – the IRS does not send out unsolicited e-mail messages to taxpayers asking for information.
For more information, visit www.irs.gov.
(Kelly Schloesser writes for Office, Chief of Public Affairs)
