What 2013 tax tips could you help provide our brothers and sisters in arms?

CSM Private RallyPoint Member — Mon, 30 Dec 2013 01:55:54 -0500

<p>I have been in the service for quite a while.  During tax season I have used HR Block, the US Army's tax assistance, and a few other services to complete and file my taxes.  A few years ago I hired a personal accountant to help me out.  My accountant showed me so many things I did not know about filing my taxes that she was able to recover thousands more for me than any other tax prep organization.  I thought I would share a few and see if others out there could provide more as well.  </p><p> </p><p>First, I completed a DITY move (conus to conus) and before I claimed my gas and toll reciepts through travel my accountant suggested I file them on my taxes and not through travel.  She explained that if I claim them through travel my refund would be taxed at 28%.  If I claim them on my taxes and did not exceed my yearly exemptions I would get all of it back.  Since I own a house and itemize my taxes she was correect.  I earned an additional $440.  You can only claim them at travel OR on your taxes.  If you do both you will be audited and possibly fined. </p><p> </p><p>Second, I cut my own hair.  I save a lot on hair cut costs and I do not have to tip myself.  That alone is a great savings but my clippers for that year busted and I bought a new pair.  My accountant took the recipts for the clippers, the dissinfectant spray, and clipper oil and deducted them from my yearly excemptions because of the professional appearance requirement of our job.  I never thought of that before she advised me of it.  </p><p> </p><p>There are many more I can think of but I am sure many of you have great ideas as well.  Please share them with us.</p>

Response by SSG Robert Burns made Dec 30 at 2013 8:02 AM

SSG Robert Burns — Mon, 30 Dec 2013 08:02:49 -0500

I've used turbo tax every single year and find it to be a great source of information.  It basically holds your hand through every possible scenario.

Response by SFC Michael Hasbun made Dec 30 at 2013 8:05 AM

SFC Michael Hasbun — Mon, 30 Dec 2013 08:05:41 -0500

Pretty much any time the Army mandates I do something that I don't get reimbursed for, I keep the reciepts and claim it on my taxes. Haircuts, gas, little things like this add up...

Response by SFC James Baber made Dec 30 at 2013 10:27 AM

SFC James Baber — Mon, 30 Dec 2013 10:27:05 -0500

Turbo Tax is the bomb for me, I get regular deductions every year that I never received going through the post tax center from years back.

Response by CSM Mike Maynard made Dec 30 at 2013 6:54 PM

CSM Mike Maynard — Mon, 30 Dec 2013 18:54:15 -0500

Talking to an accountant is a great idea.<div><br></div><div>- Unless you own a home, you probably won't have more than the "Standard Deduction", so you won't be able to claim all the military related deductions (haircuts, cleaners, associations, etc).</div><div><br></div><div>- TSP is a great way to shelter income. For every dollar you put into a regular TSP, it is deducted from your income. If you are in a 10% tax bracket, you "make" 10% on your money (through tax avoidance) in addition to what TSP actually gains.</div><div><br></div><div>- If you get a large refund (some aren't disciplined enough to save and use tax withholding as a forced savings account), increase your exemptions so that you get more of your money back each month instead of at the end of the year. In fact, you can actually owe up to $1,000 in taxes at the end of the year without penalty. It's the same as a $1,000 interest free loan from the government.</div><div><br></div><div>- To maximize your retirement savings, utilize the TSP along with an IRA - you can contribute a maximum of $23,000.</div><div><br></div><div>- Understand the difference between Roth and Tradition for both your TSP and IRA. For some folks Roth is better and for others a Traditional is better. It all depends on your anticipated tax bracket when you start pulling money out.</div><div><br></div><div><br></div><div><br></div><div><br></div>

Response by CSM Mike Maynard made Dec 30 at 2013 7:01 PM

CSM Mike Maynard — Mon, 30 Dec 2013 19:01:30 -0500

SGM Wagenbrenner,

You actually aren't "taxed" at 28% on DITY moves, you have a withholding tax (estimate) of 28%. It's just an estimate that the government uses. Just like your monthly taxes that are taking out, it is just a witholding tax (estimate), your "tax" is actually only figured out when you file at the end of the year.

When you file your taxes, your income is taxed at your actual bracket rate based on your income and has nothing to do with how much witholding or estimated taxes were withheld during the year.

So, whether you choose to use your gas receipts against the DITY claim or on your taxes at the end of the year, the actual tax liability actually ends up being the same because the gas receipts are deductions to your income whether you claim them at the point of the DITY move or at the end of the year.

The only difference is that if you don't use your gas receipts on your DITY claim, you're withholding will be more and you will in essence be giving the government an interest free loan of the money it owes you.

Response by SFC Private RallyPoint Member made Dec 31 at 2013 10:28 AM

SFC Private RallyPoint Member — Tue, 31 Dec 2013 10:28:26 -0500

I would like to say becareful when going to some place such as an HR Block. One of my good friends who work at one said that some of the worker get customers just the bare minimum. Also, becareful and dont be claim as a small business owner, this will be a flag for auditors to look at you.

My wife was selling Avon or Mary Kay ( I dont remember). However, I found out through reading some book and the IRS website she could claim her deductions for a small or home base business.

No matter what, its never to late to do some reading on your own.