Combat Pay:  Combat pay normally isn’t subject to federal income tax.  But those receiving it can choose to include it as taxable income to help qualify for the Earned Income Tax Credit (up to $5,657 for three or more qualifying children for 2009).  This is a refundable tax credit for those with low to moderate incomes.  If you serve overseas and want to qualify for the Earned Income Tax Credit , you must file a tax return – even if you’re receiving combat pay.  For details, go to www.IRS.gove and search EITC. Consult an accounting professional for specifics on your tax situation.

 Home Buyer Tax Credit – The homebuyer tax credit law allows military members on qualified extended duty an extra year to buy a primary residence – contracts must be signed by April 30, 2011, and closed by June 30, 2011.  Another plus:  Military personnel are not required to repay the tax credit if required to move by military orders.  For details, go to www.IRS.gov and search Military Home Credit.

This entry was posted on Sunday, March 14th, 2010 at 5:33 pm and is filed under Market Trends, Sandhills Families.