European Stars And Stripes (Newspaper) - February 21, 1981, Darmstadt, Hesse                                Page 8 the stars and stripes your income fax part 5 february 1981 pay is allowances Are not by Walter Yohey editors note thin is the fifth is a so Ries of Tux articles by Walter Yochy a noted tax accountant and author of the 1981 income tax guide for military personnel which is now available at your stars and stripes income which is taxable As a general Rule of All income you receive during the year must be re ported on your income tax unless it specifically excluded by Law from tax your taxable income includes any Sala and similar types of compensation you receive for per forming a professional or personal As a general Rule for military anything referred to As a pay item such As Basic incentive is tax Able while compensation referred to As an allowance such As quarters subsistence is not tax there Are exceptions to this general Rule if youre in doubt about the tax status of any military income you Check with your finance or payroll taxable military pay includes Basic pay for Active duty pay received by reservists performing training summer Camp or cruises incentive or hazardous duty pay any professional pay such As that received by Doc sea pay foreign duty pay combat pay Cash awards retainer pay reenlistment Bonus and accrued leave payments Lump sum Severance pay and similar Type wage and salary income the most common form of income re ported by taxpayers is the salary or wage income they receive from this income is reported to you and the irs on a form this form also indicates the amount of any taxes withheld from your if you receive More than one set of w2 be sure to Combine both the amounts of income and taxes reported on All sets and report the totals on your tax tip income if you held a Job where you receive tip such income is subject to both Federal income tax and social Security tax tip income includes the amounts you receive directly from a customer As Well As amounts a customer includes in the Bill and you later receive from your tip income docs not include amounts Given to other individuals bus under a tip splitting interest income with few interest you earn is taxable and must be reported on your tax unless the interest is specifically excluded from tax As in the Case of interest on municipal the most common sources of taxable interest income include savings accounts with credit savings Assoc a and similar financial also taxable is the interest received on corporate notes and debentures Treasury and Bills savings Bonds Money mar Ket certificates certificates of Deposit As Well As income you earn on income tax condemnation insurance and military savings dividend income As a general amounts you receive As a dividend Are dividends can be made in the form of or some other Type of corporate most dividends paid by corporations Are classified As Ordinary dividends Are amounts paid from the company earnings and the first of Ordinary dividends received by each taxpayer is excluded from taxes when the dividend is classified As a capital gains a return of or a tax free there Are special tax rules on How to report these these rules Are outlined in your tax form instructions or in your tax tax refund income any state or local income tax refund you receive must be reported As income you had previously claimed the amount As an itemized deduction on your Federal tax return in the year for which the refund is Alimony income Alimony payments you receive Are tax Able As Ordinary if your divorce decree provides for payment of both Alimony and child Only the Alimony portion is self employment income if youre you must report and pay tax on your self employment in Lowas Jepsen visits Stuttgart senator predicts new military bennies by John Glass Stuttgart Bureau chief Stuttgart people in the military Are going to get first rate it Doest matter what happened in the that prediction was made by Roger during a visit chairman of the manpower and personnel subcommittee of the Senate armed services said he was on a fac finding Mission to Europe to try to determine How military members arc the he has reinforced his ideas that Many of the military want to stay in the but arc faced with severe the senator said one of the biggest problems is he said his com Mittee and possibly Congress Haven done what they should for senior last Jepsen Washington was Given a mandate by the Ameri can people to provide More and better National Security and Congress is going to provide Jepsen said his committee plans to do everything it can to improve the lives of service he we Are currently looking for ways to Reward people who Are going to stay in the some of the proposals now being considered include new i Bill and in fairly certain that some Type of a new i Bill will be passed during Jepsen commented on legislation sponsored by Philip to provide a tax break for career i think that this is a Good sign for the men and women in uniform because Congress is becoming concerned and More aware of the need to provide for the general Well being of our uniformed i think that it is Long he Jepsen said one area in which he found neglect was in the treatment of unmarried people in the Jepsen said better housing is needed for the single and better merchandising practices Are needed in the Exchange he said he found some exchanges dont pay As much attention to the single military member As they do to some de two models demonstrate that this Light weight caravan at the boats and Cara two for the Road House Van show at the National exhibition pulled by this photo was Tak Center in can been before they peddled up a when the amount of your net self employment income exceeds you must also compute on schedule be and pay social Security tax on income rental income if you own property which you rent to another the rental income you receive is reportable on your while you must report this the amount on which you actually pay tax can be reduced by the expenses of owning and operating the typical expenses would include mortgage property repair and maintenance insure property management be Gal expenses associated with the and similar Royalty income Royalty income is generally defined As amounts received for allowing someone else to use your copy or some other asset you while this income is you can reduce the amount on which taxes Are paid by de ducting the costs you incurred to create or produce the asset these costs would be prorated and deducted Over the assets use Ful partnership income while a partnership is not taxed As a it is required to file an information return with the this return indicates the amount of and deductions which have been distributed to the individual partners during the tax a copy of this distribution must also be provided to the individual partners who in report the distributions on their individual in come tax this report is accomplished on a schedule income not subject to tax while there Are exceptions to just about every tax the following items of in come Are generally considered to be tax free Accident and health insurance pay ments life and casualty insurance proceeds amounts received As death or disability payments social Security and welfare payments workmen cer Tain portions of unemployment income re Bates on new car purchases gifts inheritances certain scholarship and Fellowship Grants certain distributions of Stock and warrants interest on municipal securities and similar there Are also several items of military income which Are tax As a general if an item of military income is Classi fied As an its usually tax this would include allowances for family variable cos Tolliv temporary and similar pay which a member forfeits is exclude ble from taxable income but military fines Are other nontaxable items include dividends on i and a insurance amounts paid by a state and local Bonus pay ments for wartime or general military service certain portions of disability re tired pay if permanently and totally disabled proceeds from Vogli or Sigli insurance policies amounts withheld from a member s pay for participation in the sep and a supp but any amount paid to a beneficiary under these plans is and items of a similar editors note while the information provided in this article is of general use to military please keep in mind that the space allowed for such an article dictates that these subjects be discussed in the most general More detailed guidance on each of the subjects discussed can be found in Yohes Book 1981 income tax guide for military person Nel which is now available at your stars and stripes the next article in this series will Dis cuss ways to reduce your taxable income by using income tax adjustments a most important tax Benefit for military personnel