Tax Breaks for Those in the Military
PUBLIC SERVICE ANNOUNCEMENT
Approximate time: 30 seconds
If you or a loved one is in the military, the Michigan Association of CPAs suggests that you be aware of some of the special tax breaks available to soldiers.
For example, thanks to the Heroes Earned Retirement Opportunities Act, members of the military serving in combat zones are allowed to make contributions to a traditional individual retirement account or Roth IRA based on their tax-free combat pay. Before this law took effect in 2006, soldiers who received tax-free combat pay generally did not qualify to set aside any of their earnings in tax-advantaged IRAs.
To find out more information about how the tax laws apply to those in the armed forces, turn to IRS Publication 3, “Armed Forces’ Tax Guide,” which is available online. You can access it by going to www.irs.gov, then clicking on “Individuals” and finding the section entitled “Tax Information for Members of the U.S. Armed Forces.” You can also call the IRS toll free at 1-800-829-1040.
Have more questions about how the tax laws apply to those serving in the armed forces? Turn to your local CPA for all the information you need.
