Nontaxable combat pay is considered compensation

Members of the military serving in Iraq, Afghanistan, and other combat zone localities can now put money into an IRA, even if they received tax-free combat pay. Under the Heroes Earned Retirement Opportunities (HERO) Act,

military personnel can now count tax-free combat pay when determining whether they qualify to contribute to either a Roth or traditional IRA. Before this change, members of the military whose earnings came entirety from tax-free combat pay were generally barred from using IRAs to save for retirement.
 
For those under the age of 50, the IRA contribution limit was $5,000 for 2012 and is $5,500 for 2013 and 2014. For those age 50 and over, the limit was $6,000 for 2012 and is $6,500 for 2013 and 2014. 

Tax Tips Small Business

  • New Rules for Spouses Who Operate a Business Together

    Do you qualify for simplified reporting?

    Spouses who operate a business together have a new option for reporting their business income. In the past, husband and wife joint owners were considered a partnership for reporting purposes. New rules, which took effect in 2007, give spouses the option of reporting their business income as two separate sole proprietorships.

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Small Business Quick Tip

  • Business Mileage Rate 2

    The optional standard mileage rate for the business use of an automobile is 54 cents per mile in 2016.
Wednesday, 17th July 2019
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Tax Tips Personal

  • Charitable Remainder Trusts

    Reduce your estate by gifting property

    There are many ways to contribute to a charitable organization. You can write a check, donate property, or give of your time. If you're planning for retirement, you might want to consider making a gift of a future interest in your property by establishing a charitable remainder unitrust or annuity trust. These trusts allow you to contribute the property and retain an income stream.

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Personal Quick Tip

  • IRA Contribution Deadline

    If by year-end you haven't contributed funds to your 2016 IRA, or if you've put in less than the maximum allowed, don't worry. You can contribute to either a traditional or Roth IRA until the April due date for filing your tax return for 2016 not including extensions. You can contribute up to $5,500 to your IRA each year. If you are age 50 or older, you are allowed to contribute an additional $1,000.