I just want to know if the extra money, although tax free...will be counted against us when we do our taxes. I just dont want to expect a big return and get disappointed.
2007-12-14 11:37:16 · 7 answers · asked by carclajen 2 in Politics & Government ➔ Military
Will the extra money bump us from earned income credit?
2007-12-14 11:46:26 · update #1
He is a SPC, he deployed in January, so absolutley no taxes have been taken out, and we have 2 kids...I do not make an income, just my husband.
2007-12-14 12:10:32 · update #2
Everyone's taxes comes out differently based on their own set of circumstances (e.g., owning a home, number of children, retirement contributions, other spouse's income, etc.).
Although the money is tax free (only during the time of the deployment) you will still have to file a tax return based on any taxable as well as non-taxable income for that year.
The problems that have arisen in the past for folks deployed is actually what you mentioned...earned income credit issues.
Most military installations run a tax-center staffed by at least one attorney and a folks trained to deal specifically with the impact of non-taxable income on a tax return. They will be able to help you out.
Most people are not impact at all, and few are impacted negatively, but we don't know your set of cicrumstances here, so no one can answer specifically how you will come out.
Thanks for your husband's and your service.
Edit: An E-4 with three dependents and deployed the entire taxable year...you may very well have some EIC issues. Brace yourself for that (don't spend the return money yet...even in your head). Get down to your post's tax center and let one of them crunch your numbers.
You won't take a financial hit, but just don't count on getting a big return. I hope you do get it after the numbers get crunched.
2007-12-14 12:04:57 · answer #1 · answered by ironjag 5 · 2⤊ 0⤋
Don't expect much of a return at all. All you will get is EIC you qualify for. You cannot get more back than you have paid in, and since he has paid nothing, you are not eligible to receive anything back. Your taxable income is zero, you have paid in zero, so whatever you are eligible for from EIC is all you will get.
2007-12-14 12:39:03 · answer #2 · answered by KD 5 · 0⤊ 0⤋
The $$ he earns while in Iraq is not subject to fed income tax.
His w2 will read,
Total wages 20,000.00
Taxable wages 0.00.
His return, of course, depends on what is withheld.
Now ,suppose he only deploys 6 months.. then
Total wages, 20,000.00
Taxable wages, 10,000.00.
Enjoy your refund.
2007-12-14 15:30:14 · answer #3 · answered by TedEx 7 · 0⤊ 1⤋
My husband left in Sept and got back the following Sept and because he only paid .... Oct Nov and Dec Taxes we got almost double then we had the previous years. It helped us out big time!
2007-12-14 12:42:06 · answer #4 · answered by your_sunshine78 2 · 0⤊ 1⤋
Yes, If is still the same when I was in you don't have to pay taxes while in a combat zone.
2007-12-14 12:17:18 · answer #5 · answered by Anonymous · 0⤊ 1⤋
It's tax free. That means you don't pay taxes on it. It's simple logic. Since you don't pay taxes on it, you can't overpay taxes on it, which means you can't accrue a tax refund.
2007-12-14 11:42:39 · answer #6 · answered by DOOM 7 · 1⤊ 1⤋
?? good question i wood not think so as he still gets paid by uk gov so gose in to uk bank
2007-12-14 11:41:22 · answer #7 · answered by nutterorsaintuchoose 6 · 0⤊ 1⤋