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What Can Military Claim On Taxes

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What Can Military Claim On Taxes

What can military claim on taxes Publication 4492-A - Main Contents Table of Contents DefinitionsKansas Disaster Area Storms and Tornadoes Casualty and Theft Losses Replacement Period for Nonrecognition of Gain Net Operating Losses IRAs and Other Retirement PlansDefinitions Taxation of Qualified Recovery Assistance Distributions Repayment of Qualified Recovery Assistance Distributions How To Report Qualified Recovery Assistance Distributions Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Loans From Qualified Plans Additional Tax Relief for BusinessesSpecial Depreciation Allowance Increased Section 179 Deduction Employee Retention Credit Demolition and Clean-up Costs Request for Copy or Transcript of Tax Return How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). What can military claim on taxes Definitions The following definitions are used throughout this publication. What can military claim on taxes Kansas Disaster Area The Kansas disaster area covers the Kansas counties of Barton, Clay, Cloud, Comanche, Dickinson, Edwards, Ellsworth, Kiowa, Leavenworth, Lyon, McPherson, Osage, Osborne, Ottawa, Phillips, Pottawatomie, Pratt, Reno, Rice, Riley, Saline, Shawnee, Smith, and Stafford. What can military claim on taxes Storms and Tornadoes The term “storms and tornadoes” as used in this publication, refers to the storms and tornadoes that began on May 4, 2007, and affected the Kansas disaster area (defined above). What can military claim on taxes Casualty and Theft Losses The following paragraphs explain changes to casualty and theft losses that occurred in the Kansas disaster area. What can military claim on taxes Limits on personal casualty or theft losses in the Kansas disaster area. What can military claim on taxes   Losses of personal use property that arose in the Kansas disaster area after May 3, 2007, are not subject to the $100 or 10% of adjusted gross income limits. What can military claim on taxes Qualifying losses include losses from casualties and thefts that arose in the disaster area and that were attributable to the storms and tornadoes. What can military claim on taxes When to deduct the loss. What can military claim on taxes   Casualty and theft losses are generally deductible only in the year the casualty occurred or the theft was discovered. What can military claim on taxes However, the Kansas disaster area is a Presidentially declared disaster. What can military claim on taxes Therefore, you could have elected to deduct losses from these storms and tornadoes on your tax return for the previous year. What can military claim on taxes The deadline for making this election has expired. What can military claim on taxes   The following special instructions explain how to complete your forms if you deduct the loss in 2007 or elected to deduct the loss in 2006. What can military claim on taxes Special instructions for individuals who file Form 4684 to claim a Kansas disaster area casualty or theft loss for 2007 or are amending their 2006 return. What can military claim on taxes   Individuals filing or amending their 2007 tax return or amending their 2006 tax return for casualty or theft losses that were attributable to the storms and tornadoes should enter “Kansas Disaster Area” at the top of Form 1040 or 1040X. What can military claim on taxes They must also complete and attach the 2006 version of Form 4684 for either year and enter “Kansas Disaster Area” on the top and on the dotted line next to line 11 and enter -0- on line 11. What can military claim on taxes Individuals filing or amending their 2007 tax return should cross out “2006” and enter “2007” at the top of Form 4684. What can military claim on taxes They must also enter the amount from line 21 of that form on line 20 of Schedule A (Form 1040). What can military claim on taxes Replacement Period for Nonrecognition of Gain Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned, and you receive other property or money in payment, such as insurance or a condemnation award. What can military claim on taxes Generally, you do not have to report a gain (if any) if you replace the property within 2 years (4 years for a main home in a Presidentially declared disaster area). What can military claim on taxes However, for property that was involuntarily converted after May 3, 2007, as a result of the storms and tornadoes, a 5-year replacement period applies if substantially all of the use of the replacement property is in the Kansas disaster area. What can military claim on taxes For more information, see the Instructions for Form 4684. What can military claim on taxes Net Operating Losses Qualified recovery assistance loss. What can military claim on taxes   Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. What can military claim on taxes However, the portion of an NOL that is a qualified recovery assistance loss can be carried back to the 5 tax years before the NOL year. What can military claim on taxes In addition, the 90% limit on the alternative tax NOL deduction (ATNOLD) does not apply to such portion of the ATNOLD. What can military claim on taxes   A qualified recovery assistance loss is the smaller of: The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year): Qualified recovery assistance casualty loss (as defined below), Moving expenses paid or incurred after May 3, 2007, and before January 1, 2010, for the employment of an individual whose main home was in the Kansas disaster area before May 4, 2007, who was unable to remain in that home because of the storms and tornadoes, and whose main job location (after the move) is in the Kansas disaster area, Temporary housing expenses paid or incurred after May 3, 2007, and before January 1, 2010, to house employees of the taxpayer whose main job location is in the Kansas disaster area, Depreciation or amortization allowable for any qualified recovery assistance property (even if you elected not to claim the special recovery assistance depreciation allowance for such property) for the year placed in service, and Repair expenses (including expenses for the removal of debris) paid or incurred after May 3, 2007, and before January 1, 2010, for any damage from the storms and tornadoes to property located in the Kansas disaster area. What can military claim on taxes Qualified recovery assistance casualty loss. What can military claim on taxes   A qualified recovery assistance casualty loss is any deductible section 1231 loss of property located in the Kansas disaster area if the loss was caused by the storms and tornadoes. What can military claim on taxes For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary conversion caused by the storms and tornadoes of property located in the Kansas disaster area. What can military claim on taxes Any such loss taken into account in figuring your qualified recovery assistance loss is not eligible for the election to be treated as having occurred in the previous tax year. What can military claim on taxes Amended return. What can military claim on taxes   If you have already filed your 2007 tax return and then carried your NOL back 2 years, you may file an amended return to carry back for 5 years your NOL attributable to a qualified recovery assistance loss. What can military claim on taxes More information. What can military claim on taxes    For more information on NOLs, see Publication 536. What can military claim on taxes IRAs and Other Retirement Plans New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for individuals who suffered economic losses as a result of the storms and tornadoes. What can military claim on taxes Definitions Qualified recovery assistance distribution. What can military claim on taxes   Except as provided below, a qualified recovery assistance distribution is any distribution you received and designated as such from an eligible retirement plan if all of the following apply. What can military claim on taxes The distribution was made after May 3, 2007, and before January 1, 2009. What can military claim on taxes Your main home was located in the Kansas disaster area on May 4, 2007. What can military claim on taxes You sustained an economic loss because of the storms and tornadoes. What can military claim on taxes Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. What can military claim on taxes   If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a qualified recovery assistance distribution, regardless of whether the distribution was made on account of the storms and tornadoes. What can military claim on taxes Qualified recovery assistance distributions are permitted without regard to your need or the actual amount of your economic loss. What can military claim on taxes   The total of your qualified recovery assistance distributions from all plans is limited to $100,000. What can military claim on taxes If you have distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you may allocate the $100,000 limit among the plans any way you choose. What can military claim on taxes   A reduction or offset after May 3, 2007, of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified recovery assistance distribution. What can military claim on taxes Eligible retirement plan. What can military claim on taxes   An eligible retirement plan can be any of the following. What can military claim on taxes A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan). What can military claim on taxes A qualified annuity plan. What can military claim on taxes A tax-sheltered annuity contract. What can military claim on taxes A governmental section 457 deferred compensation plan. What can military claim on taxes A traditional, SEP, SIMPLE, or Roth IRA. What can military claim on taxes Main home. What can military claim on taxes   Generally, your main home is the home where you live most of the time. What can military claim on taxes A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home. What can military claim on taxes Taxation of Qualified Recovery Assistance Distributions Qualified recovery assistance distributions are included in income in equal amounts over three years. What can military claim on taxes However, if you elect, you can include the entire distribution in your income in the year it was received. What can military claim on taxes Qualified recovery assistance distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). What can military claim on taxes However, any distributions you receive in excess of the $100,000 qualified recovery assistance distribution limit may be subject to the additional tax on early distributions. What can military claim on taxes For more information, see How To Report Qualified Recovery Assistance Distributions on page 4. What can military claim on taxes Repayment of Qualified Recovery Assistance Distributions If you choose, you generally can repay any portion of a qualified recovery assistance distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. What can military claim on taxes Also, you can repay a qualified recovery assistance distribution made on account of a hardship from a retirement plan. What can military claim on taxes However, see Exceptions below for qualified recovery assistance distributions you cannot repay. What can military claim on taxes You have three years from the day after the date you received the distribution to make a repayment. What can military claim on taxes Amounts that are repaid are treated as a qualified rollover and are not included in income. What can military claim on taxes Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. What can military claim on taxes See Form 8915 for more information on how to report repayments. What can military claim on taxes Exceptions. What can military claim on taxes   You cannot repay the following types of distributions. What can military claim on taxes Qualified recovery assistance distributions received as a beneficiary (other than a surviving spouse). What can military claim on taxes Required minimum distributions. What can military claim on taxes Periodic payments (other than from an IRA) that are for: A period of 10 years or more, Your life or life expectancy, or The joint lives or joint life expectancies of you and your beneficiary. What can military claim on taxes How To Report Qualified Recovery Assistance Distributions You will need the following information to correctly report any 2007 or 2008 qualified recovery assistance distributions. What can military claim on taxes 2007 Qualified Recovery Assistance Distributions If you received a distribution after May 3, 2007, from an eligible retirement plan, you may be able to designate it as a qualified recovery assistance distribution. What can military claim on taxes See Qualified recovery assistance distribution on page 3. What can military claim on taxes If you have not filed your 2007 income tax return, see Form 8915 and Form 8606 on this page to see how to complete these forms for any qualified recovery assistance distributions. What can military claim on taxes Be sure to attach Form 8915 and Form 8606 (if required) to your 2007 income tax return. What can military claim on taxes If you have filed your 2007 income tax return, you will need to amend your return to designate any distributions as qualified recovery assistance distributions. What can military claim on taxes You can amend your 2007 income tax return by using Form 1040X. What can military claim on taxes You will need to complete and attach Form 8915 and Form 8606 (if required) to your amended income tax return for any qualified recovery assistance distributions. What can military claim on taxes See Form 8915 and Form 8606 on this page. What can military claim on taxes Form 8915. What can military claim on taxes   For a 2007 qualified recovery assistance distribution, complete the 2005 Form 8915, Qualified Hurricane Retirement Plan Distributions and Repayments. What can military claim on taxes Before you complete the form, modify the form as follows. What can military claim on taxes Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance. What can military claim on taxes ” To the right of the title, cross out “2005” and enter “2007. What can military claim on taxes ” In Part I, at the top of column (a), cross out “2005” and enter “2007. What can military claim on taxes ” In Part II, cross out “Hurricane” in the title and enter “Recovery Assistance. What can military claim on taxes ” On lines 10 and 11, cross out “2005” and enter “2007. What can military claim on taxes ” In Part III, cross out “Hurricane” in the title and enter “Recovery Assistance. What can military claim on taxes ” On line 12, cross out “hurricane” and enter “recovery assistance. What can military claim on taxes ” On lines 13 and 14, cross out “line 15b” and “line 25b. What can military claim on taxes ” On lines 18 and 19, cross out “2005” and enter “2007. What can military claim on taxes ”   You can now complete Form 8915. What can military claim on taxes For the instructions, use the applicable dates and terms in this publication instead of those used in the 2005 Form 8915 instructions. What can military claim on taxes See Example 1 on page 5 to see how to complete Form 8915. What can military claim on taxes Form 8606. What can military claim on taxes   For a 2007 qualified recovery assistance distribution, complete or amend the 2007 Form 8606, Nondeductible IRAs. What can military claim on taxes Before you complete or amend the form, use the following additional instructions. What can military claim on taxes Form 8606, Part I. What can military claim on taxes    On line 6, subtract any repayments of qualified recovery assistance distributions from the amount you would otherwise enter on line 6. What can military claim on taxes Do not enter an amount less than -0-. What can military claim on taxes Include on line 7 the amount of any qualified recovery assistance distributions that you received even if they were later repaid. What can military claim on taxes Complete line 15 as follows. What can military claim on taxes If all of your distributions are qualified recovery assistance distributions, enter the amount from line 15 on Form 8915, line 13. What can military claim on taxes Do not enter this amount on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. What can military claim on taxes If you have qualified recovery assistance distributions as well as other distributions, you will need to multiply the amount on line 15 by a fraction. What can military claim on taxes The numerator of the fraction is your total qualified recovery assistance distributions and the denominator is the amount from Form 8606, line 7. What can military claim on taxes Enter the result in the white space in the bottom margin of the form under line 15. What can military claim on taxes To the left of this amount, enter “Qualified recovery assistance distributions” and also enter this amount on Form 8915, line 13. What can military claim on taxes Then, subtract this amount from the amount on line 15 and include the result on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. What can military claim on taxes Also, enter this amount on Form 8606 under your qualified recovery assistance distributions. What can military claim on taxes To the left of this amount, enter “Other distributions. What can military claim on taxes ” Form 8606, Part III. What can military claim on taxes    Include on line 19 the amount of any qualified recovery assistance distributions that you received even if they were later repaid. What can military claim on taxes Complete line 25 as follows. What can military claim on taxes If all of your distributions are qualified recovery assistance distributions, enter the amount from line 25 on Form 8915, line 14. What can military claim on taxes Do not enter this amount on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. What can military claim on taxes If you have qualified recovery assistance distributions as well as other distributions, you will need to multiply the amount on line 25 by a fraction. What can military claim on taxes The numerator of the fraction is your total qualified recovery assistance distributions and the denominator is the amount from Form 8606, line 21. What can military claim on taxes Enter the result in the white space in the bottom margin of the form under line 25. What can military claim on taxes To the left of this amount, enter “Qualified recovery assistance distributions” and also enter this amount on Form 8915, line 14. What can military claim on taxes Then, subtract this amount from the amount on line 25 and include the result on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. What can military claim on taxes Also, enter this amount on Form 8606 under your qualified recovery assistance distributions. What can military claim on taxes To the left of this amount, enter “Other distributions. What can military claim on taxes ” Example 1. What can military claim on taxes   On May 4, 2007, Margaret Maple lost her home due to the tornadoes on that day. What can military claim on taxes Her home was located in the Kansas disaster area. What can military claim on taxes On July 31, 2007, Margaret took out $30,000 from her 401(k) plan and an additional $15,000 from her traditional IRA in order to rebuild her home. What can military claim on taxes Margaret has not filed her 2007 return yet but would like to designate the $45,000 in distributions from her retirement plans as qualified recovery assistance distributions. What can military claim on taxes Since the distributions occurred in 2007, Margaret would modify and complete the 2005 Form 8915 as discussed on page 4. What can military claim on taxes Margaret would also need to complete Form 8606 since her distribution from her traditional IRA has nondeductible contributions from previous years. What can military claim on taxes   In addition to the $15,000 qualified recovery assistance distribution on July 31, 2007, Margaret received an additional distribution of $15,000 from her traditional IRA on October 31, 2007, that she did not designate as a qualified recovery assistance distribution. What can military claim on taxes Because Margaret has a qualified recovery assistance distribution as well as a distribution not so designated, Margaret must allocate the amount on Form 8606, line 15 to both distributions, as discussed earlier. What can military claim on taxes Margaret's qualified recovery assistance distributions are $13,125 ($26,250 × $15,000 ÷ $30,000). What can military claim on taxes Margaret enters in the white space in the bottom margin of Form 8606, the following, “Qualified recovery assistance distributions $13,125. What can military claim on taxes ” This amount is then reported on Form 8915, line 13. What can military claim on taxes Below this entry, Margaret enters “Other distributions $13,125,” and includes this amount on Form 1040, line 15b. What can military claim on taxes See Margaret's modified 2005 Form 8915 and 2007 Form 8606 shown on pages 6 through 8. What can military claim on taxes This image is too large to be displayed in the current screen. What can military claim on taxes Please click the link to view the image. What can military claim on taxes 2005 Form 8915, page 1, Illustrated Example 1. What can military claim on taxes This image is too large to be displayed in the current screen. What can military claim on taxes Please click the link to view the image. What can military claim on taxes 2005 Form 8915, page 2, Illustrated Example 1 This image is too large to be displayed in the current screen. What can military claim on taxes Please click the link to view the image. What can military claim on taxes Form 8606, page 1, Illustrated Example 1 2008 Qualified Recovery Assistance Distributions If you received a distribution in 2008 from an eligible retirement plan, you may be able to designate it as a qualified recovery assistance distribution. What can military claim on taxes See Qualified recovery assistance distribution on page 3. What can military claim on taxes You will need to complete and attach Form 8915 and Form 8606 (if required) to your 2008 income tax return for any qualified recovery assistance distributions. What can military claim on taxes See Form 8915 and Form 8606 below. What can military claim on taxes Form 8915. What can military claim on taxes   For a 2008 qualified recovery assistance distribution, you will need to complete the 2006 Form 8915. What can military claim on taxes Before you complete the form, modify the form as follows. What can military claim on taxes Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance. What can military claim on taxes ” To the right of the title, cross out “2006” and enter “2008. What can military claim on taxes ” In the first sentence of Part I and on line 1, cross out “hurricane” and enter “recovery assistance,” cross out “2006” and enter “2008,” and cross out “2005” and enter “2007. What can military claim on taxes ” At the top of column (a) cross out “2006” and enter “2008. What can military claim on taxes ” In Part II, cross out “Hurricane” in the title and enter “Recovery Assistance. What can military claim on taxes ” On lines 12, 14, and 15, cross out “2005” and enter “2007. What can military claim on taxes ” On lines 17 and 19, cross out “2006” and enter “2008. What can military claim on taxes ” In Part III, cross out “Hurricane” in the title and enter “Recovery Assistance. What can military claim on taxes ” On line 21, cross out “hurricane” and enter “recovery assistance. What can military claim on taxes ” On lines 22 and 23, cross out “line 15b” and “line 25b. What can military claim on taxes ” On lines 27, 29, and 30, cross out “2005” and enter “2007. What can military claim on taxes ” On lines 32 and 34, cross out “2006” and enter “2008. What can military claim on taxes ”   You can now complete Form 8915. What can military claim on taxes For the instructions, use the applicable dates and terms in this publication instead of those used in the 2006 Form 8915 instructions. What can military claim on taxes Example 2. What can military claim on taxes   On June 15, 2008, Margaret Maple, from the previous example, took out $15,000 from her 401(k) plan that she is designating as a qualified recovery assistance distribution. What can military claim on taxes Since the distribution occurred in 2008, Margaret would modify and complete the 2006 Form 8915 as discussed above. What can military claim on taxes Also, since Margaret is including her 2007 recovery assistance distributions in income over 3 years, she reports the applicable amount of those distributions on the modified 2006 Form 8915. What can military claim on taxes See Margaret's modified 2006 Form 8915 shown on pages 9 and 10. What can military claim on taxes This image is too large to be displayed in the current screen. What can military claim on taxes Please click the link to view the image. What can military claim on taxes 2006 Form 8915, page 1, Illustrated Example 2 This image is too large to be displayed in the current screen. What can military claim on taxes Please click the link to view the image. What can military claim on taxes 2006 Form 8915, page 2, Illustrated Example 2 Form 8606. What can military claim on taxes   For a 2008 qualified recovery assistance distribution, you may need to complete the 2008 Form 8606. What can military claim on taxes Before you complete Form 8606, use the additional instructions outlined in Form 8606, Part I, on page 4 and Form 8606, Part III, on this page. What can military claim on taxes Repayment of Qualified Distributions for the Purchase or Construction of a Main Home If you received a qualified distribution to purchase or construct a main home in the Kansas disaster area, you can repay part or all of that distribution after May 3, 2007, but no later than October 22, 2008, to an eligible retirement plan. What can military claim on taxes For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made. What can military claim on taxes To be a qualified distribution, the distribution must meet all of the following requirements. What can military claim on taxes The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA. What can military claim on taxes The distribution was received after November 4, 2006, and before May 5, 2007. What can military claim on taxes The distribution was to be used to purchase or construct a main home in the Kansas disaster area that was not purchased or constructed because of the storms and tornadoes. What can military claim on taxes Amounts that are repaid before October 23, 2008, are treated as a qualified rollover and are not included in income. What can military claim on taxes Also, for purposes of the one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover. What can military claim on taxes A qualified distribution not repaid before October 23, 2008, may be taxable for 2006 or 2007 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions. What can military claim on taxes You must file Form 8915 if you received a qualified distribution that you repaid, in whole or in part, before October 23, 2008. What can military claim on taxes See How to report, next, for information on completing Form 8915. What can military claim on taxes How to report. What can military claim on taxes   To report the repayment of a qualified distribution for the purchase or construction of a main home that was not purchased or constructed due to the storms and tornadoes, use the 2005 Form 8915, Part IV. What can military claim on taxes Before you complete the form, modify the form as follows. What can military claim on taxes Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance. What can military claim on taxes ” To the right of the title, cross out “2005” and enter “2006” or “2007. What can military claim on taxes ” Enter only the year the distribution was received. What can military claim on taxes Cross out “Hurricane” in the title of Part IV and enter “Kansas. What can military claim on taxes ” In the sentence below the title of Part IV, cross out “March 1, 2006” and enter “October 23, 2008. What can military claim on taxes ” On line 24, cross out “March 1, 2006” and enter “October 23, 2008. What can military claim on taxes ” You can now complete Part IV of Form 8915. What can military claim on taxes Use the applicable dates and terms in this publication instead of those used in the 2005 Form 8915 instructions to complete the form. What can military claim on taxes Attach Form 8915 to your original or amended return for the year of the distribution. What can military claim on taxes Amended return. What can military claim on taxes   If you repay part or all of a qualified distribution by October 22, 2008, you will need to file an amended return for that part of a distribution that was previously included in income. What can military claim on taxes Loans From Qualified Plans The following benefits are available to qualified individuals. What can military claim on taxes Increases to the limits for distributions treated as loans from employer plans. What can military claim on taxes A 1-year suspension for payments due on plan loans. What can military claim on taxes Qualified individual. What can military claim on taxes   You are a qualified individual if your main home on May 4, 2007, was located in the Kansas disaster area and you had an economic loss because of the storms and tornadoes. What can military claim on taxes Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. What can military claim on taxes Limits on plan loans. What can military claim on taxes   The $50,000 limit for distributions treated as plan loans is increased to $100,000. What can military claim on taxes In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. What can military claim on taxes If your home was located in the Kansas disaster area, the higher limits apply only to loans received during the period beginning on May 22, 2008, and ending on December 31, 2008. What can military claim on taxes One-year suspension of loan payments. What can military claim on taxes   Payments on plan loans outstanding after May 3, 2007, may be suspended for 1 year by the plan administrator. What can military claim on taxes To qualify for the suspension, the due date for any loan payment must occur during the period beginning on May 4, 2007, and ending on December 31, 2008. What can military claim on taxes Additional Tax Relief for Businesses Special Depreciation Allowance You can take a special depreciation allowance for qualified recovery assistance property (as defined below) you acquire after May 4, 2007. What can military claim on taxes The special allowance is an additional deduction of 50% of the property's depreciable basis (after any section 179 deduction and before figuring your regular depreciation deduction). What can military claim on taxes The special allowance applies only for the first year the property is placed in service. What can military claim on taxes The special allowance is deductible for both the regular tax and the alternative minimum tax (AMT). What can military claim on taxes There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. What can military claim on taxes You can elect not to deduct the special allowance for qualified recovery assistance property. What can military claim on taxes If you make this election for any property, it applies to all property in the same class placed in service during the year. What can military claim on taxes Qualified recovery assistance property. What can military claim on taxes   Property that qualifies for the special allowance for qualified recovery assistance property includes the following. What can military claim on taxes Tangible property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. What can military claim on taxes Water utility property. What can military claim on taxes Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. What can military claim on taxes (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. What can military claim on taxes ) Qualified leasehold improvement property. What can military claim on taxes Nonresidential real property and residential rental property. What can military claim on taxes   For more information on this property, see Publication 946. What can military claim on taxes Other tests to be met. What can military claim on taxes   To be qualified recovery assistance property, the property must also meet all of the following tests. What can military claim on taxes You must have acquired the property, by purchase, after May 4, 2007, but only if no binding written contract for the acquisition was in effect before May 5, 2007. What can military claim on taxes The property must be placed in service before 2009 (2010 in the case of nonresidential real property and residential rental property). What can military claim on taxes Substantially all of the use of the property must be in the Kansas disaster area and in the active conduct of your trade or business in the Kansas disaster area. What can military claim on taxes The original use of the property in the Kansas disaster area must begin with you after May 4, 2007. What can military claim on taxes Used property can be qualified recovery assistance property if it has not previously been used within the Kansas disaster area. What can military claim on taxes Also, additional capital expenditures you incurred after May 4, 2007, to recondition or rebuild your property meet the original use test if the original use of the property in the Kansas disaster area began with you. What can military claim on taxes Excepted property. What can military claim on taxes   Qualified recovery assistance property does not include any of the following. What can military claim on taxes Property required to be depreciated using the Alternative Depreciation System (ADS). What can military claim on taxes Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103. What can military claim on taxes Property for which you are claiming a commercial revitalization deduction. What can military claim on taxes Property in the same class as that for which you elected not to claim the special allowance for qualified recovery assistance property. What can military claim on taxes Property placed in service and disposed of in the same tax year. What can military claim on taxes Property converted from business use to personal use in the same tax year it is placed in service. What can military claim on taxes Property converted from personal use to business use in the same or later tax year may be qualified recovery assistance property. What can military claim on taxes Recapture of special allowance. What can military claim on taxes   If, in any year after the year you claim the special allowance, the property ceases to be qualified recovery assistance property, you may have to recapture as ordinary income any excess benefit you received from claiming the special allowance. What can military claim on taxes Amended return. What can military claim on taxes   If you have already filed your tax return, you may have to amend that return to claim any special allowance. What can military claim on taxes Additional guidance will be published on how you may claim, or elect not to claim, the special allowance if you have already filed your tax return. What can military claim on taxes Increased Section 179 Deduction An increased section 179 deduction is allowable for qualified section 179 recovery assistance property (as defined later) placed in service in the Kansas disaster area. What can military claim on taxes Increased dollar limit. What can military claim on taxes   The limit on the section 179 deduction ($125,000 for 2007, $250,000 for 2008) is increased by the smaller of: $100,000, or The cost of qualified section 179 recovery assistance property placed in service during the year (including such property placed in service by your spouse, even if you are filing a separate return). What can military claim on taxes   The amount for which you can make the election is reduced if the cost of all section 179 property you placed in service during the year exceeds $500,000 for 2007 and $800,000 for 2008 increased by the smaller of: $600,000, or The cost of qualified section 179 recovery assistance property placed in service during the year. What can military claim on taxes Qualified section 179 recovery assistance property. What can military claim on taxes   Qualified section 179 recovery assistance property is section 179 property that is qualified recovery assistance property (explained earlier under Special Depreciation Allowance). What can military claim on taxes Section 179 property does not include nonresidential real property or residential rental property. What can military claim on taxes For more information, including the requirements that must be met for property to qualify for the section 179 deduction, see chapter 2 of Publication 946. What can military claim on taxes Amended return. What can military claim on taxes   If you have already filed your tax return, you may have to amend that return for any increased section 179 deduction. What can military claim on taxes Employee Retention Credit An eligible employer who conducted an active trade or business in the Kansas disaster area can claim the employee retention credit. What can military claim on taxes The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). What can military claim on taxes Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). What can military claim on taxes Use Form 5884-A to claim the credit. What can military claim on taxes See Form 5884-A later. What can military claim on taxes The following rules and definitions apply. What can military claim on taxes Employers affected by the storms and tornadoes. What can military claim on taxes   The following definitions apply to employers affected by the storms and tornadoes. What can military claim on taxes Eligible employer. What can military claim on taxes   For this purpose, an eligible employer is any employer who meets all of the following. What can military claim on taxes Employed an average of not more than 200 employees on business days during the tax year before May 4, 2007. What can military claim on taxes Conducted an active trade or business on May 4, 2007, in the Kansas disaster area. What can military claim on taxes Whose trade or business was inoperable on any day after May 4, 2007, and before January 1, 2008, because of damage caused by the storms and tornadoes. What can military claim on taxes Eligible employee. What can military claim on taxes   For this purpose, an eligible employee is an employee whose principal place of employment on May 4, 2007, with the eligible employer was in the Kansas disaster area. What can military claim on taxes An employee is not an eligible employee for purposes of the storms and tornadoes if the employee is treated as an eligible employee for the work opportunity credit. What can military claim on taxes Qualified wages. What can military claim on taxes   Qualified wages are wages you paid or incurred before January 1, 2008, (up to $6,000 per employee) for an eligible employee beginning on the date your trade or business first became inoperable at the employee's principal place of employment immediately before May 4, 2007, and ending on the date your trade or business resumed significant operations at that place. What can military claim on taxes In addition, the wages must have been paid or incurred after May 4, 2007. What can military claim on taxes    This includes wages paid even if the employee performed no services, performed services at a place of employment other than the principal place of employment, or performed services at the principal place of employment before significant operations resumed. What can military claim on taxes    Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax Act (FUTA). What can military claim on taxes Qualified wages also include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. What can military claim on taxes Qualified wages for any employee must be reduced by the amount of any work supplementation payment you received under the Social Security Act. What can military claim on taxes   For agricultural employees, if the work performed by any employee during more than half of any pay period qualified under FUTA as agricultural labor, that employee's wages subject to social security and Medicare taxes are qualified wages. What can military claim on taxes For a special rule that applies to railroad employees, see section 51(h)(1)(B). What can military claim on taxes   Qualified wages do not include the following. What can military claim on taxes Wages paid to your dependent or a related individual. What can military claim on taxes See section 51(i)(1). What can military claim on taxes Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job training program. What can military claim on taxes Wages for services of replacement workers during a strike or lockout. What can military claim on taxes Form 5884-A. What can military claim on taxes   Use Section A of Form 5884-A (Rev. What can military claim on taxes October 2006) to claim the employer retention credit. What can military claim on taxes Section B does not apply to the Kansas disaster area. What can military claim on taxes Before you complete the form, modify the form as follows. What can military claim on taxes Cross out “Hurricane Katrina, Rita, or Wilma” in the title at the top of the form and enter “Kansas Storms and Tornadoes. What can military claim on taxes ” On line 1a cross out “Hurricane Katrina” and enter “Kansas Storms and Tornadoes,” cross out “August 28, 2005,” and enter “May 4, 2007,” and cross out “January 1, 2006,” and enter “January 1, 2008. What can military claim on taxes ”   Complete the form as instructed. What can military claim on taxes Lines 1b and 1c do not apply. What can military claim on taxes Include the amount from Form 5884-A, line 4 in the amount entered on Form 3800, line 1x. What can military claim on taxes On the dotted line to the left of line 1x, enter “5884-A. What can military claim on taxes ” Use the applicable dates and terms in this publication instead of those used in the Form 5884-A instructions. What can military claim on taxes Amended return. What can military claim on taxes   You may have to amend a previously filed return to claim the employee retention credit. What can military claim on taxes Demolition and Clean-up Costs You can elect to deduct 50% of any qualified recovery assistance clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. What can military claim on taxes Qualified recovery assistance clean-up costs are any amounts paid or incurred after May 3, 2007, and before January 1, 2010, for the removal of debris from, or the demolition of structures on, real property located in the Kansas disaster area that is: Held by you for use in a trade or business or for the production of income, or Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business. What can military claim on taxes Amended return. What can military claim on taxes   If you have already filed your tax return, you may have to amend that return to claim the 50% of any qualified recovery assistance clean-up costs. What can military claim on taxes Request for Copy or Transcript of Tax Return Request for copy of tax return. What can military claim on taxes   You can use Form 4506 to order a copy of your tax return. What can military claim on taxes Generally, there is a $39. What can military claim on taxes 00 fee (subject to change) for requesting each copy of a tax return. What can military claim on taxes If your main home, principal place of business, or tax records are located in a Presidentially declared disaster area, the fee will be waived if the assigned disaster designation (for example, “Kansas Storms”) is written in red across the top of the form when filed. What can military claim on taxes Request for transcript of tax return. What can military claim on taxes   You can use Form 4506-T to order a free transcript of your tax return. What can military claim on taxes A transcript provides most of the line entries from a tax return and usually contains the information that a third party requires. What can military claim on taxes You can also call 1-800-829-1040 to order a transcript. What can military claim on taxes How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. What can military claim on taxes By selecting the method that is best for you, you will have quick and easy access to tax help. What can military claim on taxes Contacting your Taxpayer Advocate. What can military claim on taxes   The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. What can military claim on taxes   You can contact the TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059 to see if you are eligible for assistance. What can military claim on taxes You can also call or write to your local taxpayer advocate, whose phone number and address are listed in your local telephone directory and in Publication 1546, Taxpayer Advocate Service — Your Voice at the IRS. What can military claim on taxes You can file Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), or ask an IRS employee to complete it on your behalf. What can military claim on taxes For more information, go to www. What can military claim on taxes irs. What can military claim on taxes gov/advocate. What can military claim on taxes Low Income Taxpayer Clinics (LITCs). What can military claim on taxes   LITCs are independent organizations that provide low income taxpayers with representation in federal tax controversies with the IRS for free or for a nominal charge. What can military claim on taxes The clinics also provide tax education and outreach for taxpayers who speak English as a second language. What can military claim on taxes Publication 4134, Low Income Taxpayer Clinic List, provides information on clinics in your area. What can military claim on taxes It is available at www. What can military claim on taxes irs. What can military claim on taxes gov or your local IRS office. What can military claim on taxes Free tax services. What can military claim on taxes   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. What can military claim on taxes It contains lists of free tax information sources, including publications, services, and free tax education and assistance programs. What can military claim on taxes It also has an index of over 100 TeleTax topics, (recorded tax information) you can listen to on your telephone. What can military claim on taxes   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. What can military claim on taxes Free help with your return. What can military claim on taxes   Free help in preparing your return is available nationwide from IRS-trained volunteers. What can military claim on taxes The Volunteer Income Tax Assistance (VITA) program is designed to help low-income taxpayers and Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. What can military claim on taxes Many VITA sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. What can military claim on taxes To find a site near you, call 1-800-829-1040. What can military claim on taxes Or to find the nearest AARP TaxAide site, visit AARP's website at www. What can military claim on taxes aarp. What can military claim on taxes org/taxaide or call 1-888-227-7669. What can military claim on taxes For more information on these programs, go to www. What can military claim on taxes irs. What can military claim on taxes gov and enter keyword “VITA” in the upper right-hand corner. What can military claim on taxes Internet. What can military claim on taxes You can access the IRS website at www. What can military claim on taxes irs. What can military claim on taxes gov 24 hours a day, 7 days a week to: E-file your return. What can military claim on taxes Find out about commercial tax preparation and e-file services available free to eligible taxpayers. What can military claim on taxes Check the status of your refund. What can military claim on taxes Click on Where's My Refund. What can military claim on taxes Wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). What can military claim on taxes Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund. What can military claim on taxes Download forms, instructions, and publications. What can military claim on taxes Order IRS products online. What can military claim on taxes Research your tax questions online. What can military claim on taxes Search publications online by topic or keyword. What can military claim on taxes View Internal Revenue Bulletins (IRBs) published in the last few years. What can military claim on taxes Figure your withholding allowances using the withholding calculator online at www. What can military claim on taxes irs. What can military claim on taxes gov/individuals. What can military claim on taxes Determine if Form 6251 must be filed using our Alternative Minimum Tax (AMT) Assistant. What can military claim on taxes Sign up to receive local and national tax news by email. What can military claim on taxes Get information on starting and operating a small business. What can military claim on taxes Phone. What can military claim on taxes Many services are available by phone. What can military claim on taxes Ordering forms, instructions, and publications. What can military claim on taxes Call 1-800-829-3676 to order current-year forms, instructions, and publications, and prior-year forms and instructions. What can military claim on taxes You should receive your order within 10 days. What can military claim on taxes Asking tax questions. What can military claim on taxes Call the IRS with your tax questions at 1-800-829-1040. What can military claim on taxes Solving problems. What can military claim on taxes You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. What can military claim on taxes An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. What can military claim on taxes Call your local Taxpayer Assistance Center for an appointment. What can military claim on taxes To find the number, go to www. What can military claim on taxes irs. What can military claim on taxes gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. What can military claim on taxes TTY/TDD equipment. What can military claim on taxes If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. What can military claim on taxes TeleTax topics. What can military claim on taxes Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. What can military claim on taxes Refund information. What can military claim on taxes To check the status of your refund, call 1-800-829-4477 and press 1 for automated refund information or call 1-800-829-1954. What can military claim on taxes Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). What can military claim on taxes Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund. What can military claim on taxes Evaluating the quality of our telephone services. What can military claim on taxes To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. What can military claim on taxes One method is for a second IRS representative to listen in on or record random telephone calls. What can military claim on taxes Another is to ask some callers to complete a short survey at the end of the call. What can military claim on taxes Walk-in. What can military claim on taxes Many products and services are available on a walk-in basis. What can military claim on taxes Products. What can military claim on taxes You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. What can military claim on taxes Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. What can military claim on taxes Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. What can military claim on taxes Services. What can military claim on taxes You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. What can military claim on taxes An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. What can military claim on taxes If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you're more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. What can military claim on taxes No appointment is necessary — just walk in. What can military claim on taxes If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. What can military claim on taxes A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. What can military claim on taxes If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment may be requested. What can military claim on taxes All other issues will be handled without an appointment. What can military claim on taxes To find the number of your local office, go to www. What can military claim on taxes irs. What can military claim on taxes gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. What can military claim on taxes Mail. What can military claim on taxes You can send your order for forms, instructions, and publications to the address below. What can military claim on taxes You should receive a response within 10 days after your request is received. What can military claim on taxes Internal Revenue Service 1201 N. What can military claim on taxes Mitsubishi Motorway Bloomington, IL 61705-6613 CD/DVD for tax products. What can military claim on taxes You can order Publication 1796, IRS Tax Products CD/DVD, and obtain: Current-year forms, instructions, and publications. What can military claim on taxes Prior-year forms, instructions, and publications. What can military claim on taxes Bonus: Historical Tax Products DVD - Ships with the final release. What can military claim on taxes IRS Tax Map: an electronic research tool and finding aid. What can military claim on taxes Tax law frequently asked questions (FAQ). What can military claim on taxes Tax Topics from the IRS telephone response system. What can military claim on taxes Fill-in, print, and save features for most tax forms. What can military claim on taxes Internal Revenue Bulletins. What can military claim on taxes Toll-free and email technical support. What can military claim on taxes The CD/DVD is released twice during the year in January and March. What can military claim on taxes Purchase the CD/DVD from National Technical Information Service (NTIS) at www. What can military claim on taxes irs. What can military claim on taxes gov/cdorders for $35 (no handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll free to buy the CD/DVD for $35 (plus a $5 handling fee). What can military claim on taxes Price is subject to change. What can military claim on taxes CD for small businesses. What can military claim on taxes Publication 3207, The Small Business Resource Guide CD, is a must for every small business owner or any taxpayer about to start a business. What can military claim on taxes This year's CD includes: Helpful information, such as how to prepare a business plan, find financing for your business, and much more. 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What can military claim on taxes You can get a free copy by calling 1-800-829-3676 or by visiting www. What can military claim on taxes irs. What can military claim on taxes gov/smallbiz. What can military claim on taxes Prev  Up  Next   Home   More Online Publications
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Financing Your Education

The U.S. Department of Education provides information on preparing for and funding education beyond high school with details on the federal aid programs. Another source of information on financial assistance is www.finaid.org. Both sites offer calculators to help you determine how much school will cost, how much you need to save, and how much aid you will need.

Paying for College 101

Many state governments have created 529 plans that make it easier for families to save for their child’s education. These plans, which can be sponsored by states or institutions of higher learning, encourage saving for future college costs, and the earnings grow tax-free. There are two main types: “pre-paid tuition plans” and “college savings plans.” Pre-paid plans allow you to pay for your child’s college tuition based on today’s costs, and then pay out at the future (higher) cost once your child is in college. College savings plans allow you to invest money in several investment funds, ranging in risk level, to pay for your child’s college education. For more information about the different types of 529 plans and the plans available in each state, visit collegesavings.org.

Other helpful college planning tips:

  • Pay close attention to state and federal financial aid deadlines. You'll want to file well before the deadline though, so you can receive aid before funds run out.
  • Check the Department of Education's student budget calculator. You can plug in tuition costs, room and board and other expenses along with how much money you have in student loans or grants to get an idea of where you stand financially.
  • Make sure your college bound child gets involved in the process. Point them to College.gov where they can learn to manage their money in college and avoid common scams that target students.

Student Financial Aid

Student Financial Aid is available from a wide variety of sources including the federal government, individual states, directly from colleges and universities, as well as from numerous other public and private agencies and organizations. Whatever the source, all forms of college aid fall into four basic categories:

  • Grants. Gift aid from grants does not have to be repaid and is generally awarded based at least partially on financial need.
  • Work Study. The Federal Work-Study Program (FWS) is a federally funded source of financial assistance used to offset financial education costs. Students earn money by working and attending school. The money does not have to be repaid.
  • Loans. Funds that are borrowed and must be repaid with interest are loans. As a general rule, educational loans have far more favorable terms and interest rates than traditional consumer loans.
  • Scholarships. Offered by schools, local/community organizations, private institutions and trusts, scholarships do not have to be repaid and are generally awarded based on some specific criteria.

Federal Student Aid Information Center

The Federal Student Aid Information Center (FSAIC) can answer your federal student financial aid questions and can give you all the help you need for free. You can also use the FSAIC automated response system to find out whether your Free Application for Federal Student Aid (FAFSA) application has been processed and to request a copy of your Student Aid Report (SAR).

Federal Loan Program Repayment Information

  • Public Service Loan Forgiveness Program.Offers forgiveness for outstanding federal loans for individuals working full time in public service jobs.
  • Income-Based Repayment Plan. Helps to make repaying education loans more affordable for low-income borrowers.
Both programs offer generous benefits, but the rules may seem complex, so it is important to get all of the details. For more information on these repayment options:

Comparing Student Loans

The Consumer Financial Protection Bureau (CFPB) has a Know Before You Owe Student Loan website, developed in partnership with the Department of Education. It provides financial aid shopping sheets that help schools communicate the financial aid options available to students.

The What Can Military Claim On Taxes

What can military claim on taxes 4. What can military claim on taxes   Limit on Elective Deferrals Table of Contents Excess elective deferrals. What can military claim on taxes General Limit 15-Year RuleYears of Service Figuring the Limit on Elective DeferralsExample The second and final component of MAC is the limit on elective deferrals. What can military claim on taxes This is a limit on the amount of contributions that can be made to your account through a salary reduction agreement. What can military claim on taxes A salary reduction agreement is an agreement between you and your employer that allows for a portion of your compensation to be directly invested in a 403(b) account on your behalf. What can military claim on taxes You can enter into more than one salary reduction agreement during a year. What can military claim on taxes More than one 403(b) account. What can military claim on taxes If, for any year, elective deferrals are contributed to more than one 403(b) account for you (whether or not with the same employer), you must combine all the elective deferrals to determine whether the total is more than the limit for that year. What can military claim on taxes 403(b) plan and another retirement plan. What can military claim on taxes If, during the year, contributions in the form of elective deferrals are made to other retirement plans on your behalf, you must combine all of the elective deferrals to determine if they are more than your limit on elective deferrals. What can military claim on taxes The limit on elective deferrals applies to amounts contributed to: 401(k) plans, to the extent excluded from income, Roth contribution programs, Section 501(c)(18) plans, to the extent excluded from income, Savings incentive match plan for employees (SIMPLE plans), Simplified employee pension (SEP) plans, and All 403(b) plans. What can military claim on taxes Roth contribution program. What can military claim on taxes   Your 403(b) plan may allow you to designate all or a portion of your elective deferrals as Roth contributions. What can military claim on taxes Elective deferrals designated as Roth contributions must be maintained in a separate Roth account and are not excludable from your gross income. What can military claim on taxes   The maximum amount of contributions allowed under a Roth contribution program is your limit on elective deferrals, less your elective deferrals not designated as Roth contributions. What can military claim on taxes For more information on the Roth contribution program, see Publication 560, Retirement Plans for Small Business. What can military claim on taxes Excess elective deferrals. What can military claim on taxes   If the amount contributed is more than the allowable limit, you must include the excess that is not a Roth contribution in your gross income for the year contributed. What can military claim on taxes General Limit Under the general limit on elective deferrals, the most that can be contributed to your 403(b) account through a salary reduction agreement is $17,500 for 2013 and 2014. What can military claim on taxes This limit applies without regard to community property laws. What can military claim on taxes 15-Year Rule If you have at least 15 years of service with an educational organization (such as a public or private school), hospital, home health service agency, health and welfare service agency, church, or convention or association of churches (or associated organization), the limit on elective deferrals to your 403(b) account is increased by the least of: $3,000, $15,000, reduced by the sum of: The additional pre-tax elective deferrals made in prior years because of this rule, plus The aggregate amount of designated Roth contributions permitted for prior years because of this rule, or $5,000 times the number of your years of service for the organization, minus the total elective deferrals made by your employer on your behalf for earlier years. What can military claim on taxes If you qualify for the 15-year rule, your elective deferrals under this limit can be as high as $20,500 for 2013 and 2014. What can military claim on taxes To determine whether you have 15 years of service with your employer, see Years of Service , next. What can military claim on taxes Years of Service To determine if you are eligible for the increased limit on elective deferrals, you will first need to figure your years of service. What can military claim on taxes How you figure your years of service depends on whether you were a full-time or a part-time employee, whether you worked for the full year or only part of the year, and whether you have worked for your employer for an entire year. What can military claim on taxes You must figure years of service for each year during which you worked for the employer who is maintaining your 403(b) account. What can military claim on taxes If more than one employer maintains a 403(b) account for you in the same year, you must figure years of service separately for each employer. What can military claim on taxes Definition Your years of service are the total number of years you have worked as a full time employee for the employer maintaining your 403(b) account as of the end of the year. What can military claim on taxes Figuring Your Years of Service Take the following rules into account when figuring your years of service. What can military claim on taxes Status of employer. What can military claim on taxes   Your years of service include only periods during which your employer was a qualified employer. What can military claim on taxes Your plan administrator can tell you whether or not your employer was qualified during all your periods of service. What can military claim on taxes Service with one employer. What can military claim on taxes   Generally, you cannot count service for any employer other than the one who maintains your 403(b) account. What can military claim on taxes Church employee. What can military claim on taxes   If you are a church employee, treat all of your years of service with related church organizations as years of service with the same employer. What can military claim on taxes For more information about church employees, see chapter 5. What can military claim on taxes Self-employed ministers. What can military claim on taxes   If you are a self-employed minister, your years of service include full and part years in which you have been treated as employed by a tax-exempt organization that is a qualified employer. What can military claim on taxes Total years of service. What can military claim on taxes   When figuring prior years of service, figure each year individually and then add the individual years of service to determine your total years of service. What can military claim on taxes Example. What can military claim on taxes The annual work period for full-time teachers employed by ABC Public Schools is September through December and February through May. What can military claim on taxes Marsha began working with ABC schools in September 2009. What can military claim on taxes She has always worked full-time for each annual work period. What can military claim on taxes At the end of 2013, Marsha had 4. What can military claim on taxes 5 years of service with ABC Public Schools, as shown in Table 4-1. What can military claim on taxes Table 4-1. What can military claim on taxes Marsha's Years of Service Note. What can military claim on taxes This table shows how Marsha figures her years of service, as explained in the previous example. What can military claim on taxes Year Period Worked Portion of Work Period Years of Service 2009 Sept. What can military claim on taxes –Dec. What can military claim on taxes . What can military claim on taxes 5 year . What can military claim on taxes 5 year 2010 Feb. What can military claim on taxes –May . What can military claim on taxes 5 year 1 year Sept. What can military claim on taxes –Dec. What can military claim on taxes . What can military claim on taxes 5 year 2011 Feb. What can military claim on taxes –May . What can military claim on taxes 5 year 1 year Sept. What can military claim on taxes –Dec. What can military claim on taxes . What can military claim on taxes 5 year 2012 Feb. What can military claim on taxes –May . What can military claim on taxes 5 year 1 year Sept. What can military claim on taxes –Dec. What can military claim on taxes . What can military claim on taxes 5 year 2013 Feb. What can military claim on taxes –May . What can military claim on taxes 5 year 1 year Sept. What can military claim on taxes –Dec. What can military claim on taxes . What can military claim on taxes 5 year Total years of service 4. What can military claim on taxes 5 years Full-time or part-time. What can military claim on taxes   To figure your years of service, you must analyze each year individually and determine whether you worked full-time for the full year or something other than full-time. What can military claim on taxes When determining whether you worked full-time or something other than full-time, use your employer's annual work period as the standard. What can military claim on taxes Employer's annual work period. What can military claim on taxes   Your employer's annual work period is the usual amount of time an individual working full-time in a specific position is required to work. What can military claim on taxes Generally, this period of time is expressed in days, weeks, months, or semesters, and can span 2 calendar years. What can military claim on taxes Note. What can military claim on taxes You cannot accumulate more than 1 year of service in a 12-month period. What can military claim on taxes Example. What can military claim on taxes All full-time teachers at ABC Public Schools are required to work both the September through December semester and the February through May semester. What can military claim on taxes Therefore, the annual work period for full-time teachers employed by ABC Public Schools is September through December and February through May. What can military claim on taxes Teachers at ABC Public Schools who work both semesters in the same calendar year are considered working a full year of service in that calendar year. What can military claim on taxes Full-Time Employee for the Full Year Count each full year during which you were employed full-time as 1 year of service. What can military claim on taxes In determining whether you were employed full-time, compare the amount of work you were required to perform with the amount of work normally required of others who held the same position with the same employer and who generally received most of their pay from the position. What can military claim on taxes How to compare. What can military claim on taxes   You can use any method that reasonably and accurately reflects the amount of work required. What can military claim on taxes For example, if you are a teacher, you can use the number of hours of classroom instruction as a measure of the amount of work required. What can military claim on taxes   In determining whether positions with the same employer are the same, consider all of the facts and circumstances concerning the positions, including the work performed, the methods by which pay is determined, and the descriptions (or titles) of the positions. What can military claim on taxes Example. What can military claim on taxes An assistant professor employed in the English department of a university will be considered a full-time employee if the amount of work that he or she is required to perform is the same as the amount of work normally required of assistant professors of English at that university who get most of their pay from that position. What can military claim on taxes   If no one else works for your employer in the same position, compare your work with the work normally required of others who held the same position with similar employers or similar positions with your employer. What can military claim on taxes Full year of service. What can military claim on taxes   A full year of service for a particular position means the usual annual work period of anyone employed full-time in that general type of work at that place of employment. What can military claim on taxes Example. What can military claim on taxes If a doctor works for a hospital 12 months of a year except for a 1-month vacation, the doctor will be considered as employed for a full year if the other doctors at that hospital also work 11 months of the year with a 1-month vacation. What can military claim on taxes Similarly, if the usual annual work period at a university consists of the fall and spring semesters, an instructor at that university who teaches these semesters will be considered as working a full year. What can military claim on taxes Other Than Full-Time for the Full Year If, during any year, you were employed full-time for only part of your employer's annual work period, part-time for the entire annual work period, or part-time for only part of the work period, your year of service for that year is a fraction of your employer's annual work period. What can military claim on taxes Full-time for part of the year. What can military claim on taxes   If, during a year, you were employed full-time for only part of your employer's annual work period, figure the fraction for that year as follows: The numerator (top number) is the number of weeks, months, or semesters you were a full-time employee. What can military claim on taxes The denominator (bottom number) is the number of weeks, months, or semesters considered the normal annual work period for the position. What can military claim on taxes Example. What can military claim on taxes Jason was employed as a full-time instructor by a local college for the 4 months of the 2013 spring semester (February 2013 through May 2013). What can military claim on taxes The annual work period for the college is 8 months (February through May and July through October). What can military claim on taxes Given these facts, Jason was employed full-time for part of the annual work period and provided ½ of a year of service. What can military claim on taxes Jason's years of service computation for 2013 is as follows: Number of months Jason worked = 4 = 1 Number of months in annual work period 8 2 Part-time for the full year. What can military claim on taxes   If, during a year, you were employed part-time for the employer's entire annual work period, you figure the fraction for that year as follows: The numerator (top number) is the number of hours or days you worked. What can military claim on taxes The denominator (bottom number) is the number of hours or days normally required of someone holding the same position who works full-time. What can military claim on taxes Example. What can military claim on taxes Vance teaches one course at a local medical school. What can military claim on taxes He teaches 3 hours per week for two semesters. What can military claim on taxes Other faculty members at the same school teach 9 hours per week for two semesters. What can military claim on taxes The annual work period of the medical school is two semesters. What can military claim on taxes An instructor teaching 9 hours a week for two semesters is considered a full-time employee. What can military claim on taxes Given these facts, Vance has worked part-time for a full annual work period. What can military claim on taxes Vance has completed 1/3 of a year of service, figured as shown below. What can military claim on taxes Number of hours per week Vance worked = 3 = 1 Number of hours per week considered full-time 9 3 Part-time for part of the year. What can military claim on taxes   If, during any year, you were employed part-time for only part of your employer's annual work period, you figure your fraction for that year by multiplying two fractions. What can military claim on taxes   Figure the first fraction as though you had worked full-time for part of the annual work period. What can military claim on taxes The fraction is as follows: The numerator (top number) is the number of weeks, months, or semesters you were a full-time employee. What can military claim on taxes The denominator (bottom number) is the number of weeks, months, or semesters considered the normal annual work period for the position. What can military claim on taxes   Figure the second fraction as though you had worked part-time for the entire annual work period. What can military claim on taxes The fraction is as follows: The numerator (top number) is the number of hours or days you worked. What can military claim on taxes The denominator (bottom number) is the number of hours or days normally required of someone holding the same position who works full-time. What can military claim on taxes   Once you have figured these two fractions, multiply them together to determine the fraction representing your partial year of service for the year. What can military claim on taxes Example. What can military claim on taxes Maria, an attorney, teaches a course for one semester at a law school. What can military claim on taxes She teaches 3 hours per week. What can military claim on taxes The annual work period for teachers at the school is two semesters. What can military claim on taxes All full-time instructors at the school are required to teach 12 hours per week. What can military claim on taxes Based on these facts, Maria is employed part-time for part of the annual work period. What can military claim on taxes Her year of service for this year is determined by multiplying two fractions. What can military claim on taxes Her computation is as follows: Maria's first fraction Number of semesters Maria worked = 1 Number of semesters in annual work period 2 Maria's second fraction Number of hours Maria worked per week = 3 = 1 Number of hours per week considered full-time 12 4 Maria would multiply these fractions to obtain the fractional year of service: 1 x 1 = 1         2 4 8         Figuring the Limit on Elective Deferrals You can use Part II of Worksheet 1 in chapter 9 to figure the limit on elective deferrals. What can military claim on taxes Example Floyd has figured his limit on annual additions. What can military claim on taxes The only other component needed before he can determine his MAC for 2014 is his limit on elective deferrals. What can military claim on taxes Figuring Floyd's limit on elective deferrals. What can military claim on taxes   Floyd has been employed with his current employer for less than 15 years. What can military claim on taxes He is not eligible for the special 15-year increase. What can military claim on taxes Therefore, his limit on elective deferrals for 2014 is $17,500 as shown in Table 4-2. What can military claim on taxes Floyd's employer will not make any nonelective contributions to his 403(b) account and Floyd will not make any after-tax contributions. What can military claim on taxes Additionally, Floyd's employer does not offer a Roth contribution program. What can military claim on taxes Figuring Floyd's MAC Floyd has determined that his limit on annual additions for 2014 is $52,000 and his limit on elective deferrals is $17,500. What can military claim on taxes Because elective deferrals are the only contributions made to Floyd's account, the maximum amount that can be contributed to a 403(b) account on Floyd's behalf in 2014 is $17,500, the lesser of both limits. What can military claim on taxes Table 4-2. What can military claim on taxes Worksheet 1. What can military claim on taxes Maximum Amount Contributable (MAC) Note. What can military claim on taxes Use this worksheet to figure your MAC. What can military claim on taxes Part I. What can military claim on taxes Limit on Annual Additions     1. What can military claim on taxes Enter your includible compensation for your most recent year of service 1. What can military claim on taxes $70,475 2. What can military claim on taxes Maximum: For 2013 enter $51,000 For 2014 enter $52,000 2. What can military claim on taxes 52,000 3. What can military claim on taxes Enter the lesser of line 1 or line 2. What can military claim on taxes This is your limit on annual additions 3. What can military claim on taxes 52,000   Caution: If you had only nonelective contributions, skip Part II and enter the amount from line 3 on line 18. What can military claim on taxes     Part II. What can military claim on taxes Limit on Elective Deferrals     4. What can military claim on taxes Maximum contribution: For 2013, enter $17,500 For 2014, enter $17,500 4. What can military claim on taxes 17,500   Note. What can military claim on taxes If you have at least 15 years of service with a qualifying organization, complete lines 5 through 17. What can military claim on taxes If not, enter zero (-0-) on line 16 and go to line 17. What can military claim on taxes     5. What can military claim on taxes Amount per year of service 5. What can military claim on taxes 5,000 6. What can military claim on taxes Enter your years of service 6. What can military claim on taxes   7. What can military claim on taxes Multiply line 5 by line 6 7. What can military claim on taxes   8. What can military claim on taxes Enter the total of all elective deferrals made for you by the qualifying organization for prior years 8. What can military claim on taxes   9. What can military claim on taxes Subtract line 8 from line 7. What can military claim on taxes If zero or less, enter zero (-0-) 9. What can military claim on taxes   10. What can military claim on taxes Maximum increase in limit for long service 10. What can military claim on taxes 15,000 11. What can military claim on taxes Enter the total of additional pre-tax elective deferrals made in prior years under the 15-year rule 11. What can military claim on taxes   12. What can military claim on taxes Enter the aggregate amount of all designated Roth contributions permitted for prior years under the 15-year rule 12. What can military claim on taxes   13. What can military claim on taxes Add lines 11 and 12 13. What can military claim on taxes   14. What can military claim on taxes Subtract line 13 from line 10 14. What can military claim on taxes   15. What can military claim on taxes Maximum additional contributions 15. What can military claim on taxes 3,000 16. What can military claim on taxes Enter the least of lines 9, 14, or 15. What can military claim on taxes This is your increase in the limit for long service 16. What can military claim on taxes -0- 17. What can military claim on taxes Add lines 4 and 16. What can military claim on taxes This is your limit on elective deferrals 17. What can military claim on taxes 17,500   Part III. What can military claim on taxes Maximum Amount Contributable     18. What can military claim on taxes If you had only nonelective contributions, enter the amount from line 3. What can military claim on taxes This is your MAC. What can military claim on taxes    If you had only elective deferrals, enter the lesser of lines 3 or 17. What can military claim on taxes This is your MAC. What can military claim on taxes    If you had both elective deferrals and nonelective contributions, enter the amount from line 3. What can military claim on taxes This is your MAC. What can military claim on taxes (Use the amount on line 17 to determine if you have excess elective deferrals as explained in chapter 7. What can military claim on taxes ) 18. What can military claim on taxes $17,500 Prev  Up  Next   Home   More Online Publications