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Military wives? Tax question

Moms View Message Board: General Discussion: Archive March 2007: Military wives? Tax question
By Mrsheidi on Thursday, March 1, 2007 - 11:57 pm:

On Scott's W2 form, it stated in the first (wages) box that he earned a small amount and then his medicare/ss box was 5 times that amount. Aren't the wages supposed to be higher than the medicare/ss amount?

If the army messed up his W-2 forms, I'm going to be SO mad. :( They already "accidentally" discharged him too early, which I was initially excited about, until we found out (the hard way) that they pulled our insurance without notifying us. They "forgot" that he was deployed and it was THEM that sent us the Western Union letter in the first place.

Venting venting venting...

By Ginny~moderator on Friday, March 2, 2007 - 06:52 am:

It does sound like they got the wrong numbers in the wrong box. But I have no idea who you contact.

By Marg on Friday, March 2, 2007 - 06:56 am:

It's been along time (seeing a military W2)but certain items are not taxable to federal wages and the federal box is often smaller in wages then social security and medicare.

Housing allowance, health insurance, etc.

I'm thinking it may be correct.

It should have differences in boxes 12 and 14 to explain some of the differences.

By Marg on Friday, March 2, 2007 - 07:23 am:

Thought this might help, you might want to go to the IRS website. Looks like alot of things have changed for military pay. I know the article states 2003 but it might help you.

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IRS Provides Help to Get Tax Assistance to Military Families;
New Web Page Created for U.S. Armed Services

IR-2003-43, April 3, 2003

Related Fact Sheet: FS-2003-11

WASHINGTON — The Internal Revenue Service has created a new section on its Web site containing important information to help ensure members of the U.S. Armed Forces serving in a combat zone get all of the tax benefits available to them.

The new section highlights several special tax provisions that apply to those in combat, which can include extensions for filing tax returns and paying taxes and exclusion of some military pay from taxes.

The new Web section includes:

Questions and answers on exclusions, extensions and other tax benefits available to members of the Armed Forces serving in a combat zone.
Publication 3, Armed Forces’ Tax Guide, which covers the special tax situations of active members of the U.S. Armed Forces.
Several recent news releases and notices, including Tax Tip 2003-41, Reservists, New Enlistees May Get Deferral for Back Taxes; news release IR-2002-18, Tax Relief for Troops in Afghanistan Combat Zone; Notice 2002-17, Tax Relief for those Involved in Operation Enduring Freedom.
A special e-mail address for members of the U.S. Armed Forces, their spouses, authorized agents or representatives, which can be used to notify the IRS about someone serving in a combat zone.
"At this important time, our dedicated military personnel in combat zones should not be worried about tax issues," said IRS Acting Commissioner Bob Wenzel. "We want each of them to receive all of the tax benefits that they are entitled to. We want all of our servicemen and servicewomen — and their families — to know that we are here to help."

Generally, enlistees up to warrant officers (including commissioned warrant officers) exclude all their military pay received for military service in a combat zone. For commissioned officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received. For 2002, this limit was $5,532.90 and for 2003, it is $5,882.70. Amounts excluded from gross income are not subject to federal income tax.

The IRS automatically extends the deadline for filing tax returns, paying taxes, filing claims for refund and taking other actions related to federal income tax for U.S. Armed Forces personnel serving in a combat zone. The IRS also extends the deadline for those in the U.S. Armed Forces deployed overseas away from their permanent duty station in support of operations in a qualified hazardous duty area but who are outside that area.

The deadline for filing returns, making payments or taking any other action with the IRS is extended for at least 180 days after:

The last day of qualifying combat zone service, or
The last day of any continuous qualified hospitalization for injury from the combat zone.
The IRS is currently working with the military to obtain information about reservists and regular military personnel serving in combat areas. During this interim period, people in the military, their spouses or their authorized representatives have several options to claim the filing extensions or filing exclusions:

When filing returns, mark “Combat Zone” at the top of the form along with the date of deployment.
Contact the IRS through the special e-mail address at Correspondence should include the name, stateside address, date of birth, and date of deployment of the service member. (No Social Security numbers should be included in the e-mail.) The IRS emphasizes only military-related e-mails should go to this address. Calls can also be made to the main IRS help line at 800-829-1040.
These two steps also apply if a notice inadvertently goes to an individual serving in a combat zone or his or her spouse. The notice can be deferred by following the e-mail steps or by sending the notice back to the IRS marked with the words “Combat Zone” and the date of deployment.

The IRS plans to take additional steps and provide additional guidance on issues involving military personnel and combat zones. This new information will also be posted to the Armed Forces page on

Subscribe to IRS Newswire

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By Marg on Friday, March 2, 2007 - 07:42 am:

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Publication 3 - Main Contents


Table of Contents

Gross Income
Foreign Source Income
Community Property
Adjustments to Income
Armed Forces Reservists
Individual Retirement Arrangements
Moving Expenses
Combat Zone Exclusion
Combat Zone
Serving in a Combat Zone
Amount of Exclusion
Alien Status
Resident Aliens
Nonresident Aliens
Dual-Status Aliens
Sale of Home
Rules for Sales in 2005
Sale of a Home Before May 7, 1997
Itemized Deductions
Miscellaneous Itemized Deductions
Earned Income Credit
Child Tax Credit
Combat Zone Tax Forgiveness
Terrorist or Military Action Tax Forgiveness
Claims for Tax Forgiveness
Filing Returns
Where To File
When To File
Signing Returns
Extension of Deadline
Service That Qualifies for an Extension of Deadline
Filing Returns for Combat Zone or Contingency Operation Participants
How To Get Tax Help
Gross Income
Members of the Armed Forces receive many different types of pay and allowances. Some are included in gross income while others are excluded from gross income. Included items (Table 1) are subject to tax and must be reported on your tax return. Excluded items (Table 2) are not subject to tax, but may have to be shown on your tax return.

For information on the exclusion of pay for service in a combat zone and other tax benefits for combat zone participants, see Combat Zone Exclusion and Extension of Deadline, later.

Table 1. Included Items

These items are included in gross income, unless the pay is for service in a combat zone.
Basic pay • Active duty Bonuses • Career status
• Attendance at a designated service school • Enlistment
• Back wages • Officer
• CONUS COLA • Overseas extension
• Drills • Reenlistment
• Reserve training
• Training duty
Other payments • Accrued leave
Special • Aviation career incentives • High deployment per diem
pay • Career sea • Personal money allowances paid to
• Diving duty high-ranking officers
• Foreign duty (outside the 48 contiguous • Student loan repayment from programs
states and the District of Columbia) such as the Department of Defense
• Foreign language proficiency Educational Loan Repayment Program
• Hardship duty when year's service (requirement) is not
• Hostile fire or imminent danger attributable to a combat zone
• Medical and dental officers
• Nuclear-qualified officers Incentive pay • Submarine
• Optometry • Flight
• Pharmacy • Hazardous duty
• Special duty assignment pay • High altitude/Low altitude (HALO)
• Veterinarian

Table 2. Excluded Items

The exclusion for certain items applies whether the item is furnished in kind or is a reimbursement or allowance. There is no exclusion for the personal use of a government-provided vehicle.
Living allowances • BAH (Basic Allowance for Housing). You can deduct mortgage interest and real estate taxes on your home even if you pay these expenses with your BAH Combat zone pay • Compensation for active service while in a combat zone or a qualified hazardous duty area.
Note: Limited amount for officers
• BAS (Basic Allowance for Subsistence)
• Housing and cost-of-living allowances Family • Certain educational expenses for
abroad whether paid by the U.S. allowances dependents
Government or by a foreign • Emergencies
government • Evacuation to a place of safety
• OHA (Overseas Housing Allowance) • Separation

Moving • Dislocation Death • Burial services
allowances • Military base realignment and allowances • Death gratuity payments to
closure benefit eligible survivors
(the exclusion is limited as • Travel of dependents to burial site
described on page 4)
• Move-in housing Other payments • Defense counseling
• Moving household and • Disability, including payments received
personal items for injuries incurred as a d dependent • Survivor and retirement protection
allowances students plan premiums
• Leave between consecutive • Uniform allowances
overseas tours • Uniforms furnished to enlisted personnel
• Reassignment in a dependent
restricted status In-kind military • Dependent-care assistance program
• Transportation for you or your benefits • Legal assistance
dependents during ship overhaul • Medical/dental care
or inactivation • Commissary/exchange discounts
• Per diem • Space-available travel on irect result
• Moving trailers or mobile homes of a terrorist or military action
• Storage • Group-term life insurance
• Temporary lodging and • Professional education
temporary lodging expenses • ROTC educational and subsistence
Travel • Annual round trip for

By Marg on Friday, March 2, 2007 - 07:43 am:

Sorry I don't mean to make this so long but military pay is so different and more difficult to understand than any civilian pay.

Good luck!

By Insaneusmcwife on Friday, March 2, 2007 - 09:38 am:

Dh said it sounds right to him. The smaller amount is the taxable income that your dh has received. The income he receives while being in a combat zone (up to a certain amount) is tax free. The larger amount should be the amount that he actually made and is what he will get credited on through Social Security. How far are you from a military base? They have a place called VITA and they know all the military credits you are eligible for and they will do your taxes free of charge.

By Boxzgrl on Friday, March 2, 2007 - 10:08 am:

Ditto Kristie. It sounds right to me as well.

By Mrsheidi on Saturday, March 3, 2007 - 12:22 pm:

Thanks, ladies. I saw my tax guy yesterday and that's exactly what he said, Kristie. I won't let any army personnel touch my taxes. They've screwed up everything in our lives already. Plus, we collected $ from Scott's other work and he had a dividend check and stock stuff, so that would confuse them, I'm sure.

By Hol on Saturday, March 3, 2007 - 11:06 pm:

What do you mean, Heidi, that they pulled your insurance? You mean the SGLI? Because they "thought" that he was out already? Idiots!

We once had an allotment taken out for a car payment to go to a military credit union. DH sent the form in before he got deployed. Well, I found out from the credit union that they weren't getting the money. I called military pay and they told me that there was an "X" that had not been put into the proper box on the form. I said, "Well, you have my permission to put it in the typewriter and type in the "X". The person said, "We can't do that M'am. Your husband will have to fill out a new form". I said, "He is overseas". They wouldn't budge. I had to call DH and have a new form sent, etc. (The days of just snail mail, too). I'm lucky I didn't have my car repossesed. LOL! :)

If workers in the private sector operated like that, they'd be out of business. :)

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