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

  • Do You Know How Much Your Business Is Worth?

    Tips for placing a value on your business

    There are several reasons why you should know the value of your business. if you are planning to sell your business, the general rule is that you should sell it for fair market value. In many instances the term "fair market value" is somewhat ambiguous. In the simplest sense, fair market value is what a willing buyer would pay a willing seller, with each party knowing all the pertinent facts.

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Small Business Quick Tip

  • Personal Assets to a Business

    If you have contributed personal assets, such as a computer or vehicle to your business, the lower of the fair market value or your cost basis of these assets qualifies as a business deduction, subject to depreciation limitations, beginning with the date of conversion.
Saturday, 25th May 2019
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Tax Tips Personal

  • Gambling Income and Losses

    Six Tips on Gambling Income and Losses

    Whether you roll the dice, play cards or bet on the ponies, all your winnings are taxable. The IRS offers these six tax tips for the casual gambler.

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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.