The tax deadline for service people is three months away and all of the buzz about debt ceilings might have you worried. Rest assured, there are still a few good men in Washington looking out for the economic rights of military members. One of the more significant bills that’s still generating buzz is the Disabled Veterans Tax Termination Act.

The Disabled Veterans Tax Termination Act is a bill introduced by Georgia congressman Sanford Bishop in January of 2009. The bill is largely seen as bipartisan; in fact, The Military Officers Association of America, the Disabled American Veterans, and the Military Order of the Purple Heart among others all support the bill and its lobbying efforts. How would this bill, if passed, affect the country’s disabled vets fiscally?

Not only would veterans with a service-connected disability rating lower than 50% receive disability compensation, they’d then be able to receive retired pay. Additionally, the bill would tear down the roadblock that prevents physically disabled members of the armed forces that served fewer than 20 years to retired pay and VA compensation.

Until the DVTTA has its day in Washington, disabled veterans and other military personnel should fully investigate their options as taxpayers. What credits and perks are available to you specifically?

Free Tax Prep. Filing taxes can get quite complicated for those in the service and their families. Filing taxes comes for free for most, but assistance from someone who knows what they’re doing can cost you. Fortunately, there are several places that discount this price. TurboTax, through its Intuit Tax Freedom Project, offers it for free.

Military Spouses Residency Relief Act. The husbands and wives of service people were previously required to officially change their residency to whichever state their spouse was relocated to because of a permanent change of station. Which may not sound like such a big deal until you consider state tax laws and voting, among other issues.

Early IRA Withdrawals. The penalties of taking your retirement savings (401k or IRA) before you’re supposed to can shrink your savings pitifully. However, if you were called to active duty for more than 179 days, were called after 9/11 and withdraw funds while on active duty, no penalties will be counted against you. That said, you should investigate your options thoroughly before withdrawing from your retirement accounts as it could make retirement planning more difficult in the future.

State Tax Relief. Everyone knows that tax laws and credits vary state-to-state; while some states have no income tax for civilian residents, others charge sky-high property taxes, and each state has different benefits pertaining to military personnel and veterans. For instance, Virginia significantly reduces its property tax levied on severely disabled veterans. The link above lists benefits for veterans including tax benefits, loans, and other areas.

With the average tax refund rising to just over $3000, it can seem to many filers that the refund check is a fabulous spring income boost that will help with bills, vacation plans, or that shiny new toy you’ve been eying. But is it really ideal to receive such a large sum back from the government? Don’t forget the fact that the $3000 you happily take back in April is YOUR money, which you have loaned interest-free to the government. So if getting a huge lump sum back is how you make financial ends meet every spring, consider these tips for making the most of your money.

Aim For a Modest Return

In order to reduce your tax return, you will need to reduce the amount of tax withheld from each paycheck. This can feel a little tricky because you do not want to end up owing money at the end of the fiscal year. The IRS provides a withholding calculator that will help you determine how to fill out the W-4 form with your employer. Your goal is to maximize the amount of money you take home every month, and end up with a small tax return—think about $500 or less—at the end of the year. That small return provides you with a safety net in case of miscalculation but does not give the government all the money that could be earning you interest.

Make That Money Work For You

If this will be the first year that you do not plan on a large return, it can be easy to let the extra money in each paycheck simply slip away in thoughtless purchases. If you know that you cannot muster the discipline necessary to put those little amounts of money aside each month, then it might be a good idea to let Uncle Sam hold onto your money for you. However, with the convenience of automatic transfers, even the most savings-averse filer should be able to put aside the money that would have otherwise been collected as tax.

Do some homework to find out where you will be able to earn some interest on that money. ING Direct, Ally, and FNBO Direct are all online banks that offer high yield savings accounts. While the interest from these accounts will not allow you to retire early, they will certainly earn you more money than Uncle Sam will get you for holding onto the same amount of money. With an automatic deduction every month to one of these banks, you won’t even notice the missing money and you’ll be earning, to boot. Here are some more tips on how to use your tax refund.

Don’t Go on Autopilot

After doing the homework to determine how much less you can have withheld, it can be tempting to simply do the same thing next year. But it’s important to reassess your tax circumstances every year, so that you can always maximize your take home pay. That way, you won’t have to wait for April to feel financially fit. You’ll have that “refund” around all the time, earning you interest and giving you a financial cushion. And doesn’t that feel more empowering than a $3000 check from DC?

If you’re expecting a tax refund, you obviously want to get it as quickly as possible. That way, you can put it to work for you sooner rather than later. The fastest and safest way to get your tax refund is to submit your return online, using e-file.

There are three ways to file your tax return electronically:

1. Use your own tax software. Most tax programs include the option to submit your return by e-file.
2. Use a tax preparer. You can find an authorized e-file tax professional by clicking through a ink on the IRS home page at irs.gov and entering your zip code.
3. Use “Free File” at the IRS website. You’ll find it at irs.gov/freefile.

If you e-file and request a direct deposit, you’ll probably receive your funds in less than ten days. But if you submit a paper return and request a direct deposit or a paper check it could take several weeks longer. Plus you run the risk that your tax form(s) or refund check could get lost or stolen. If you don’t receive your refund, it’s important that you make an inquiry about it using the IRS Refund Status Tool.

What To Do With Your Tax Refund

What Should You Do With Your Tax Refund?

Once you receive your refund, there are a gazillion things you can do with it. Taking a vacation or going on a shopping spree immediately come to mind, but I bet you won’t be surprised if I tell you that the best thing you can do with the money is to save it. It might not be as much fun as many other options, but it will certainly go a long way toward improving your personal finances. Here are my recommendations for what to do with your tax refund in the order of priority:

1. Add it to your emergency fund. One of the most important defenses you have against unexpected expenses or the loss of income is a cushy emergency fund equal to at least six months worth of your living expenses. If you don’t have a reserve fund or if it’s not as big as it should be, make sure that’s the number one priority for your tax refund!
2. Purchase health insurance. If you don’t have health insurance, consider using your tax refund to pay premiums for an affordable policy, such as a high-deductible plan. That’s the kind of policy that also gives you the ability to open up a tax-advantaged Health Savings Account.
3. Pay down high-interest debt. If you have at least a few months worth of living expenses saved in an emergency fund, but also have expensive consumer debt like credit cards, retail store cards, or payday loans, use your tax refund to pay them down.
4. Fund an IRA. If you don’t have an Individual Retirement Arrangement (IRA), use your tax refund to open an IRA. You can contribute up to $5,000 to an IRA in 2011, or $6,000 if you’re age 50 or older. Be aware that there are tax penalties for withdrawing money from a retirement account before the age of 59½. So be sure to put money in an IRA only after you’ve established an emergency fund and are sure you won’t need the money.
5. Fund a 529 Education Savings Account. If you’re saving money for your own education or that of a child’s, consider putting your tax refund in a 529 plan, where funds can grow completely tax-free if you spend them on qualified education expenses.

You can even opt to split up your refund and have it automatically deposited into multiple financial accounts, like an IRA and a savings account, using IRS Form 8888. If you just want to have the money sent to one account, simply use the direct deposit line that’s on the regular tax form.

An important tip is that if you consistently get big tax refunds each year, you probably need to adjust your withholding so less tax will be deducted from your paychecks. Use the IRS Withholding Calculator to help you complete a new Form W-4 and submit it to your employer. Remember that it’s not a good idea to use a tax return as a forced savings plan—it’s better to pay yourself first with higher paychecks throughout the year. That way you can save the amount you’d otherwise be paying to the government and make interest on it, instead of loaning it to Uncle Sam for free.

One of the most common questions I hear this time of year is should I hire a tax professional or do my taxes myself? Preparing your own tax return can be a time-consuming and hair-pulling experience. This is why so many people turn to the tax professionals, including me. But a good tax accountant can save you more than brain cells–they can save you money by claiming tax deductions and credits that you may not even know exist.

Should You Hire a Tax Pro?

Tax help is available

So, where do you go for tax help? You can choose between tax preparers, national tax franchises, independent tax firms, CPAs, enrolled agents, and tax attorneys, for example. Here’s an overview of each type of tax professional, so you can determine which one may be best for your situation:

Should You Use a Tax Preparer?

A tax preparer is someone who’s willing to help you complete your tax return for a fee. Anyone can run an ad or print a business card and call themselves a tax preparer. They may or may not have any specialized tax education or experience. So it’s critical that you make sure someone who claims to be a tax preparer is truly qualified or comes highly recommended. Never work with an unknown tax preparer if your tax situation is at all complex due to ownership of a small business, rental property, investments in the stock market, or working outside of the U.S., for example.

Should You Use a Tax Franchise?

The national tax franchises–such as H&R Block or Jackson Hewitt–have thousands of offices in the U.S. They employ tax professionals with varying levels of education and experience. Here’s a tip for working with a tax franchise: Always request to work with the most senior tax preparer in their office. It won’t cost you any more, but should result in you getting to work with a more seasoned professional. If your tax circumstances are somewhat complicated, be sure to ask if they can provide the specialization that you need.

Should You Use an Independent Tax Firm?

Independent tax firms are locally owned accounting businesses that work with individuals and companies. They usually have accountants on staff with a range of tax specialization and experience. If you have a fairly complex tax situation, a local firm may be your best option. In my experience, independent firms can get to know your individual needs and offer a high level of consulting and customer service.

Should You Use a CPA?

Certified public accountants, or CPAs, are professional accountants licensed by the state where they work. They must pass a rigorous exam and usually go on to specialize in a certain area such as business consulting or corporate accounting. They can even represent you before the IRS; but not all CPAs handle tax issues. The American Institute of Certified Public Accountants website at aicpa.org has more information about this profession. You may find CPAs that specialize in taxes at a tax franchise office or at an independent firm.

Should You Use an Enrolled Agent?

Enrolled agents are another type of licensed tax professional. Like CPAs and attorneys, they can represent taxpayers before the IRS in the event of an audit or dispute. They must pass a rigorous exam and are qualified to prepare tax returns for individuals and businesses. They must complete continuing education and adhere to a code of professional conduct. They may work for a tax franchise office or an independent tax firm. You can learn more at naea.org, the website for the National Association of Enrolled Agents.

Should You Use a Tax Attorney?

Tax attorneys are lawyers who have chosen to work exclusively in tax law. They’ve been admitted to their state bar by passing a licensing exam. Tax attorneys are needed for complex legal matters such as disputes that go before the U.S. Tax Court. In special cases they may prepare or assist with extremely complicated tax returns for businesses or individuals.

Questions To Ask a Tax Professional

Before you enlist the services of a tax pro, be sure you fully understand how qualified they are to handle your specific needs. Be sure to read chapter 10 of my new book, Money Girl’s Smart Moves to Grow Rich, for more information about taxes and choosing a pro. Here are eight basic questions you should ask to get to know the company and your preparer’s level of experience:

1. How long have you or your firm prepared tax returns for clients?
2. Who would actually be preparing my tax return?
3. What licenses and experience would my tax preparer have?
4. How do you charge for your services?
5. Do you specialize in any certain tax issues?
6. When could I expect to have my tax return completed?
7. What’s your policy for doing return amendments if changes or corrections are needed in the future?
8. How do you help me if I’m questioned or audited by the IRS?

If a tax preparer won’t sufficiently answer your questions, keep searching for one that makes you feel comfortable. The best tax professionals should also ask you questions to determine if you’re qualified for specific deductions and tax credits to lower your tax bill.

The fee you pay for professional tax help usually depends on the complexity of your return. Some professionals charge by the number of tax forms you require, some charge by the hour, and some bill a flat fee. The bill for one of my tax returns for a simple LLC with a single rental property has been as high as $875 with a large firm and as little as $200 with a local CPA–so don’t be afraid to shop around!

Here are some red flags to watch out for:

• a firm or individual who wants to charge you based on how much refund you’ll receive
• being asked to sign a blank tax return form
• a recommendation that your tax refund be sent somewhere besides directly to your bank account

How to Do a Background Check on a Tax Preparer

After your interview with a potential tax professional, you can do a background check to verify their licensing status and uncover any disciplinary action taken against them. Your state’s board of accountancy will provide information about CPAs. The IRS list of disciplinary actions reveals suspensions, disbarments, and censure taken against CPAs, enrolled agents, and attorneys. And the American Bar Association offers a directory of lawyer disciplinary agencies by state.

How to Choose a Tax Professional

You probably know that you have until April 18 to file taxes this year. If you haven’t started, now’s the time to begin gathering your information and to decide who’s going to do your taxes. If your tax return should be uncomplicated, a qualified tax preparer or tax franchise office may be a fast and inexpensive option for you. But if your tax return has any degree of complexity, they may not have the expertise to maximize potential deductions. Use a CPA or an enrolled agent to manage a complicated situation and help lower your tax liability.

Always consider whether anyone who prepares your tax return will be in business in the future if you need their help to explain information on your return to the IRS. Whether you choose to prepare your own return or hire someone to do it for you, remember that the person ultimately responsible for its accuracy is you! When you sign or submit your return, you are responsible for the accuracy of the information. That’s the law—even when the return is prepared by someone else or with the help of tax software.

The military’s Homeowner’s Assistance Program (HAP) has been in place for decades to help homeowners who have trouble selling their homes because of a Base Realignment and Closure (BRAC) initiative. The latest round of BRAC closures happened to coincide with the recent housing market crisis in America. A new addition to HAP was added in 2009 as part of the American Economic Recovery Act and includes protection to members of the military who are forced to move because of a permanent change of station or PCS move and lost value on the price of their home. The old and new versions of the law provide some monetary relief to eligible members of the military and federal employees who suffered a financial loss on the sale of their primary residence when they were not able to sell their homes under reasonable terms or conditions.

There Are Two Versions Of The Homeowner’s Assistance Program

There are two versions of the Homeowners Assistance Program: conventional and expanded. The conventional HAP was established by Congress in1966. It is only available for members of the military when the services conduct a round of base closures. The HAP is a special relief program that must be approved to start, and then it provides financial assistance to homeowners who are not able to sell their homes under reasonable terms because an announced closure that adversely affects the real estate market of a local area. The Army Corps of Engineers runs HAP on behalf of all the military branches. The expanded HAP is exactly like the conventional version, but it has been modified recently to include wounded service members, surviving spouses of military members who are killed in combat, and other members of the military who receive permanent change of station (PCS) orders.

Conventional Homeowner’s Assistance Program Is Taxable

The conventional HAP benefits payments are taxable. Members of the military owe taxes on support they receive when the support is above 95% of the prior fair market value (PFMV) of his or her home. For more information on the Conventional Homeowner’s Assistance Program, you should view the HAP website and the Army Corps of Engineers’ FAQ page.

Expanded Homeowner’s Assistance Program Is Not Taxable

Originally, the Expanded Homeowner’s Assistance Program and specifically the PCS clause was not tax exempt. President Obama signed HR 3548 which is the Unemployment Compensation Extension Act of 2009. He signed the bill into law which also included a new exception for Expanded HAP benefit payments from federal taxes. Payments to military members are also not subject to social security or Medicare taxes. Although HAP is exempt from Federal taxes, there may be state taxes that military members may have to pay. Applicants who had taxes withheld prior to the President signing the law change should receive a W2c which is a corrected Wage and Tax Statement from the Internal Revenue Service.

As with any complicated tax situation, HAP applicants should seek legal and tax assistance if there are any specific questions about the tax implications of HAP benefit payments. The military’s Homeowner’s Assistance Program (HAP) is a viable option for members of the Armed Forces who have had trouble selling their homes during the recent housing crisis. View the eligibility requirements and how to file for benefits at the Homeowner’s Assistance Program (HAP) website.

Many people put off thinking about taxes until a month or two before the tax deadline, but in reality, the end of the year is a great time to think about your taxes. In fact, what you do at the end of the year can often have a much greater impact than what you do at the beginning of the year. Here are some year-end planning moves to make to save on taxes:

Year End Tax Planning Moves

Contribute to Retirement Savings

It is always a savvy move to make tax-deferred retirement plan contributions. Contribute as much as your employer will match into your Thrift Savings Plan, 401k, or 403b plans. If your contributions have not been enough, speak with your employer about raising your contribution amounts moving forward.

You can also contribute to a Traditional IRA, which offers tax deferrals in the year you make the contribution (and you pay taxes when you make withdrawals at retirement age). Be sure to compare Traditional and Roth IRAs to make sure the Traditional IRA is better than a Roth for your specific situation.

Take Some Investment Losses

When you sell a stock or a mutual fund which you have had for a year or more and you take a loss, you can deduct the loss from your capital gains. Any losses still left can allow for another $3,000 reduction in your regular taxable income provided you do not buy the same security again within a 30 day time period.

Lock in Your Gains

It is predicted that the tax on long-term capital gains will go up next year so now is a good time to sell and pay lower tax rates in 2010. You can then take the cash and buy what you want. When selling at a taxable gain, there are no limits as to when you can re-buy the same security.

Pay attention to your investments

Some investments, such as mutual funds and Exchange Traded funds (ETFs), may have some nasty tax consequences if you buy or sell at the end of the year, due to capital gains and losses. Be sure to read these Financial tax planning tips for more information.

Take Advantage of Deductible Spending

You have no limit when it comes to the itemized deductions you can take for 2010. However, in 2011 it is likely that those who earn more than $100,000 will face limitations. Any charitable contributions you want to make, healthcare costs you can afford to spend, and local taxes that can be paid out before December 31^st, you should take the opportunity to do so now since the opportunity may not be there next year.

Make Home Improvements

You can earn up to a 30% tax credit for making your home more energy efficient. You can install new windows, doors, water heaters, and air conditioners and earn up to a $1500 tax credit if the work is done before December 31. You can only earn the credit if you did not use it for last year.

Give Freely

Donations to many charities and non-profit organizations may be tax deductible. The end of the year is a great time to go through your closets and purge unwanted or unnecessary items. You will help someone else, free up space and earn great tax deductions – all great benefits. Be sure to verify your donations will be tax deductible before making the deduction and ensure you get a receipt for your donation. Here is some information to help you determine which charities are legitimate and avoid charity scams.

Customize these tips to your situation. Not all of these tips will work for everyone – remember, each of us has a unique financial and tax situation. Be sure to check with a qualified tax professional or financial planner before making any major financial decisions. In addition, be sure to check with your state for availability of tax deductions or other benefits.

On November 11, 2009, the Military Spouses Residency Relief Act was signed into law.  The United States government felt this legislation was needed to reduce the burden military families faced when filing income tax returns.  Here we take a look at this legislation and how it affects military families.

The Military Spouses Residency Relief Act

What is it the Military Spouses Residency Relief Act?

The Military Spouses Residency Relief Act (Public Law 111-97, S. 475) is designed to provide relief from certain tax restrictions placed on the spouses of military servicemembers.  Prior to this Act being signed into law, a military servicemember was permitted to use their home state as their legal state of residence regardless of where they were stationed.  Unfortunately the same rules did not apply to the (non-military) spouses of these men and women.  As a result, the non-military spouses were required to file his or her state taxes in the state in which they were stationed versus their “home” state.  Beyond taxation issues, when a person is required to change their state of residency, there are other issues that arise such as voting, car registration and even savings plans such as 529′s used to save for college tuition.

How does the Military Spouses Residency Relief Act work?

This law makes it possible for the non-military spouse to retain their home state of residency only if the reason for leaving was a result of a permanent change of station (PCS) for their military spouse.  Under this legislation, non-military spouses are able to file their state taxes in the same state as their spouse.  Because the military spouse retains their original state of residency or home state status, the new state in which they reside will not be able to tax earned income.

What does it mean for military spouses?

As a result of this legislation, the way married couples file their tax returns will change if the non-military spouse opts to retain their home state of residency.  If the non-military spouse earns income in the state in which they are stationed, that state may still withhold state income taxes.  This means the individual will be required to file a state tax return to recover their withheld taxes and in turn file a joint resident return with their military spouse in their home state.

There have been no changes to how non-military income is taxed in a state other than your home state.  For example, if a servicemember stationed in another state has a part time job that is not related to the military, that state is permitted to tax this non-military income.  When this situation occurs, the military spouse will file a nonresident return and pay tax in the state in which they are living and earning the non-military income.  When filing their tax return in their home state, they will see an out-of-state credit for taxes paid in the state in which they reside.

There can be pros and cons for this tax status, depending on your situation. Military families who have questions regarding how the  Military Spouses Residency Relief Act affects their taxes can seek advice from a tax professional in their state of residency as well as the state in which they currently reside.  It is important that all servicemembers and their spouses to understand how this Act affects their tax filing status.

The value of homes has been dropping steadily throughout most of the country. While that might not bode well for most property owners, it might also represent a small opportunity.  Despite the decrease in home values, most property taxes have not decreased to reflect the change in value. Since property taxes are somewhat based on the value of a home, it seems many people are paying taxes which are too high for the homes they live in.  If you feel you’re property taxes are too high, here are some tips for challenging property taxes:

How to Challenge Property Taxes

Contact Your Local Tax Assessor’s Office

Your first step for challenging your property taxes is to visit or call your local tax assessor’s office. You can find the phone number in the government pages of the local phone book, or on your town’s website.  Ask them when you can challenge your property taxes, since it can’t be done too early in the year or too late after property tax bills are mailed.

Tax Assessment Letter

By law, you should receive a notice in the mail which indicates your tax assessment value of your home for the year.  Despite the fact that it’s required by law, it may be a good idea to fill out a Property Tax Return form at the Assessor’s office to request your tax assessment value.  This at least makes the office aware you are looking to get this information, and will help you get the process moving.

Challenge the Tax Assessment of Your Property

Once you receive your tax assessment letter, you can file an appeal if you disagree with the state’s assessed value of your home.  You must write a letter and send it to your Tax Assessor’s office within 45 days of receipt of your Tax Assessment letter to file your appeal.

In the letter, indicate why you disagree with the assessment and provide some evidence.  You can have your home appraised to get the current appraisal value of your home.  This service will cost between $300 and $500 for most homes.

In addition, you’ll want to include sale prices of homes in your area which are comparable in size to your own home.  If your home is assessed at $190,000 and you show that four homes near by of similar size just sold for $160,000 – you’ll have a decent case to support your appeal.  You can probably find a real estate agent who has software and can run a report for you fairly quickly if you ask.

Once you have your letter and proof, send it all back to the Tax Assessor’s office and wait for a reply.  They will either agree with you and modify your property tax bill, or stand by their original assessment.

What Happens If They Deny Your Appeal?

If the Tax Assessor’s Office doesn’t accept your proof or request for modifying your property taxes,  you can write them again and say you still do not agree which will prompt them to do further research and another letter will be sent to you with their final decision of the case.  If they still don’t agree with your reason for appealing property taxes, you can get all of your proof together and make an appearance in front of the county’s Board of Commissioners.  Here, you can once again state your reason for challenging the property taxes, and see what they decide.  The Board of Commissioners decision will be the non-disputable decision of the case.

Some cities and counties are hurting for cash due to the challenging economy, so many people are having mixed results with these efforts. That said, it doesn’t hurt to try. You just might save a few hundred dollars per year on your taxes.

The 2010 Homebuyers Tax Credit’s April deadline has passed for the majority of first-time homebuyers and sellers – but there are some groups still eligible to qualify for the tax break.

If you are a member of the military, the Foreign Service or part of the intelligence community serving outside the US, you can still take the $8000 credit for first time buyers or $6500 credit for sellers and repeat homebuyers for an additional year.

The Original Home Buyers Tax Credit

After the Obama Administration extended the original Homebuyer tax credit from November 2009, the new guidelines required qualified purchases to include having a binding sales agreement in place before April 30, 2010 with a closing date set by June 30, 2010. Those who qualified for the tax credit had the option to include it on either their 2009 or 2010 tax forms. Those who did not meet those qualifications are no longer eligible for the tax credit.

Extension Plans

After the April 30th date, many hoped that the plan would be again extended to all people. The housing market was looking up again as so many took advantage of the tax credit and became first time homebuyers. Additionally, people were willing to sell their homes for a credit of $6500, helping the market to restabilize. Individuals that qualified for the credit had the option of claiming the credit on either their 2009 or 2010 return. In light of the better housing circumstances and because the government had more pressing issues to deal with, the extension did not come to pass.

However, those who are in service with the military or are employees of the federal government’s intelligence agencies or a member of the Foreign Service have to option of an extended tax credit. Those who are on extended duty outside of the United States for at least 90 days between December 31, 2008 and ending May 1, 2010. Those who are forced to return to the United States for medical reasons before fulfilling their original duties may qualify for a one year extension.

Extension Requirements

Eligible military or federal employees have an extra year to purchase a home in the US and still qualify for a credit. Contracts must be entered into by April 30, 2011 with a closing date of not later than June 30, 2011. Military and government personnel and their spouses are eligible for the credit if at least one of them has been serving overseas. Homes to be purchased can not exceed $800,000 and purchases must be made by someone at least 18 years of age.

To Claim First Time Homebuyer’s Tax Credit

In order to claim the tax credit, a copy of the properly executed settlement statement is required to be attached to the income tax return and Form 5405 First Time Homebuyer Credit and Repayment of the Credit needs to be completed.

For those who are purchasing new homes or mobile homes and do not receive a settlement statement, the following requirements apply:

• Mobile homes – who include a copy of the executed retail sales contract showing all parties’ names, property address, purchase price and date of purchase.
• Newly constructed homes – include a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.

For more information about the extension of the Homebuyer Tax Credit, visit the IRS website where you can also download appropriate tax forms.

Did Tax Day come a little quickly for you this year? If so, you can file for a free extension on your taxes. Anyone can file for a tax extension, but it’s important to note that if you will owe taxes to the government, your taxes are due on April 15th, even if you filed for a tax deadline extension. You will need to pay a minimum of 90% of your total tax bill to avoid late fees or penalties. If you are expecting a refund, there are no fees or penalties. However, some military members are eligible for a tax extension without being required to pay the minimum estimated taxes.

Tax deadline extension for military members

Military members who served overseas in a tax free zone in the previous or current tax year are eligible to apply for an extension and in many cases will not have to pay their estimated taxes before April 15th. This is a nice way for he IRS to recognize your duties in serving our country. However, there are many details and your estimated taxes may be due on April 15th, so be sure to check with a professional accountant or with the IRS. The IRS has a dedicated military tax extension page on their website.

Additional military tax resources

• Most military members are eligible for free tax preparation.
• Many military members are qualified to file their taxes several months later without penalties – especially if they served overseas in a tax free combat zone.
• Many military members who deployed are eligible for the Heroes Earned Retirement Opportunities Act (Heroes Act), which gives military members the opportunity to contribute to a traditional IRA, even if all of their income was earned in a tax free zone and was considered tax-Free Military Pay.
• Was your military pay and benefits taxable or non-taxable? Check out these resources: Taxable Military Income and Non-Taxable Military Income.

The military pay system is full of rules that are specific to military members and many of them can have an affect on your taxes. When in doubt, contact a tax professional for more information regarding your specific situation!