New law provides additional tax benefits for military personnel.
The tax changes include the following:
* Members of the Armed Forces serving in a contingency operation are now eligible for the same extension of the tax filing deadline as applies to members of the Armed Forces serving in a combat zone.
* The 5-year period used to determine whether taxpayers can exclude gain from the sale of their main home may be suspended during the period the taxpayer or spouse served on qualified official extended duty as a member of the Armed Forces.
* Military base realignment and closure benefits are now generally excludable from income.
* Benefits received after 2002 under a dependent-care assistance program now are nontaxable.
* The death gratuity paid to a survivor of a member of the Armed Forces has been increased to $12,000 and is all nontaxable.
In addition, the Act also provides tax relief in the areas of distributions from a qualified tuition program and deductibility of travel expenses for Armed Forces Reserve members.
Practitioners with clients affected by the new law can find additional details on the Internal Revenue Service's Web site at: http://www.irs.gov/newsroom/article/0%2C%2Cid=1181 04%2C00.html.
In addition, the IRS has released Publication 3, "Armed Forces' Tax Guide," for use in preparing 2003 returns, available at: http://www.irs.gov/pub/irs-pdf/p3.pdf. The guide provides further details about the Military Family Tax Relief Act, as well as important changes made by the Service Members Civil Relief Act.
IRS Tax Talk Today Program Explores Tax Shelters
Tax shelters were the subject of the Internal Revenue Service's Tax Talk Today program on Feb. 10. An IRS report on trends seen in tax shelter activity; issue identification, legal guidance and analysis of shelters; and a review of current IRS tax shelter regulation and compliance strategies were covered in the Web cast. To access the archived program (available for one year after broadcast), go to www.taxtalktoday.tv. The Web site also provides information regarding eligibility for CPE.
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|Title Annotation:||tax info|
|Date:||Mar 1, 2004|
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