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2003 Military Tax Guide (For 2002 Tax Year)
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Tax relief for victims of terrorist or military action. The Victims of Terrorism Tax Relief Act of 2001 provided tax relief to those injured or killed in the April 19, 1995 (Oklahoma City), September 11, 2001, or certain anthrax attacks. The Act also provides relief to survivors of those killed in the attacks and others who were affected by those attacks. It includes:

 

• Forgiveness of federal tax liability for those who died as a result of the attacks.

• A reduction in the estate tax of those who died as a result of the attacks.

• Taxfree treatment of qualified disaster relief payments, certain disability income, certain death benefits, and certain cancellation of indebtedness.

For more information on these relief provisions and methods for claiming tax refunds, see Publication 3920, Tax Relief for Victims of Terrorist Attacks.

Afghanistan designated a combat zone. By Executive Order No. 13239, Afghanistan (and airspace above) is designated as a combat zone beginning September 19, 2001.

Third party designee. You can check the Yes box in the Third Party Designee area of your return to authorize the IRS to discuss your return with a friend, family member, or any other person you choose. This allows the IRS to call the person you identified as your designee to answer any questions that may arise during the processing of your tax return. It also allows your designee to perform certain actions. See the income tax package for details.

Parent of a kidnapped child. The parent of a child who is presumed by law enforcement authorities to have been kidnapped by someone who is not a family member may be able to take that child into account in determining his or her eligibility for the following.

 

• Head of household or qualifying widow(er) with dependent child-filing status.

• Exemption for dependents.

• Child tax credit.

• Earned income credit.

For more information, see Publication 501, Exemptions, Standard Deduction, and Filing Information.

Child tax credit. The maximum child tax credit you can claim for each qualifying child is $600. The qualifications for claiming the additional child tax credit have been changed to include a qualifying individual with fewer than 3 children. See Child Tax Credit, later.

Payments to Holocaust victims. Restitution payments received after 1999 (and certain interest earned on the payments) are not taxable and do not affect the taxability of certain benefits, such as social security benefits. You may have to file Form 1040X if you included these amounts in income on your 2000 or 2001 tax return or if you used the payments in any computation affecting your tax liability.

Extension of time to file. You can get an automatic 4-month extension if, by April 15, 2003, you do one of the following.

 

1) File Form 4868.

2) Pay part or all of the tax you expect to owe for 2002 electronically.

 

a) By credit card.

b) By authorizing an electronic funds withdrawal from your checking or savings account.

For details, see Form 4868.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1–800–THE–LOST (1–800–843–5678) if you recognize a child.

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Above Information Extracted from IRS Publication #3, Armed Forces Tax Guide

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