European Stars And Stripes (Newspaper) - March 6, 1989, Darmstadt, Hesse                                The irs gives the Bottom line on this year s top tax problems o it a 10 i 10 is amounts Lor most taxpayers Tor 1988 filing status amount single $3,000 married filing jointly $5,000 married filing separately $2,500 head of household. $4,400 qualifying widower $5,000 most taxpayers have a Choice of either taking a Standard deduction or itemizing their deductions. The Standard deduction is a Dollar amount thai reduces the amount of income on which you Are taxed. It is a Benefit that is intended to reduce the need for Many taxpayers to itemize. 1 1 if a serve remember does itemize can he deduct he Cost of buying cleaning and replacing uniforms. Serve remembers May deduct amounts spent to buy and keep up required military Latigue uniforms if local military regulations prohibit their Oil duly Wear. You must reduce the expense by any non taxable uniform allowance or reimbursement received. A member also May deduct the Cost of required items that a not replace regular clothing. Such items include insignia of rank corps devices Epa lets Aiguille Tes and swords  expenses Are claimed As miscellaneous deductions on schedule a. You can Only deduct that part of miscellaneous deductions thai exceeds 2 percent of your adjusted Gross income. Real property taxes assessed on american taxpayers by foreign governments can be claimed As a . Tax deduction in most cases. In the United kingdom renters often have to pay a rental lax based simply on occupying an apartment. Is that tax deductible As a foreign real estate tax an occupancy tax or Rales in is   deductible new cart ii be claimed As a. Foreign lax credit. What is the child and dependent care credit can service members Quality for it what Are its benefits if you pay someone to care for your dependent who Thunder 5, your disabled dependent,.or your disabled spouse so hat you can work or look for work you May be Able to take a lax credit to up to 30 percent of the amount you pay. The credit can be As. High As-$1.440. Unlike the earned income credit it is not limited to those who live in the  the cars provider also May be a nonresident alien what Are the rules on opening an Ira and gelling a lax break for this year for which income bracket is it the most beneficial an individual retirement account Ira is a personal savings plan that lets you Sot aside Money for your retirement. You May deduct your contributions of the plan in whole or in part depending on your circumstances and earnings in your Ira Are not taxed until they Are distributed to you anyone who has compensation can set up an a compensation includes wages salaries commissions lips professional fees bonuses and any other amounts you receive for providing personal services it also includes taxable Alimony and separate maintenance payments retirement income including Federal civilian and military retirement income is not compensation for Ira purposes. You must make contributions to your Ira during the lax year by the due Date of your return not including extensions. This Wilt be april 17,1989. The most that can be contributed each year is the $2,000. However this year not All Ira contributions Aro tax deductible. Ii you Are covered by a retirement plan at work the following rules apply. If single Ira contributions Are fully tax deductible Only if your income is $25,000 or Jess. A partial lax deduction is available for those with income Between $25,000 and 135,000. To married and filing a joint return Ira contributions Are fully deductible Only if income is 140,000 or less the couple can get a partial lax deduction for Ira contributions with income Between $40.000 and $50,000. If married a  separately the Filer Musl have income below $10,000 to get even a partial lax deduction if you Are not covered by a retirement plan at work. Ira contributions generally remain tax deductible the Only exceptions Are for single people who make More than $40,000 a year. 15 the 1hs operates toll free numbers in the United states that taxpayers can Call Lor answers to Basic tax questions. Are there similar Telephone systems that can be accessed overseas if not Are there plans to establish any soon the internal Revenue service planned to add a new service in 1989it Wrea Telephone assistance to Canada and eight european countries. Budget limits required the Agency to postpone bringing this service on Lino. Ii a Serai remember or . Government employee living overseas earns Money moonlighting on the local Economy must they pay income tax on it to which country the United states or the country where they were employed As mentioned before a income is to1 be reported on the service member s us lax return because Federal taxation is based on . The status of forces restricts taxation by the Host country Only on income earned by the Servic member while providing services to the . Government any outside inc Moi including self employment would come under the Juristic lion of the Host country. This is also Liue of family members who Aro engaged in House hold products or mail order cosmetics Typo of business 5 if a service member bought a House while on a tour of duty overseas but moved Back to the United states without being Able to sell it can he or she rent the Home at a loss and claim the toss As a tax break is there any limit on How Long that tax break can remain in effect Rontal income Musl be claimed and any qualified expense such As repairs property taxes and depreciation May be deducted. There is no time limit on taking a rental toss in future years More information on the topic 15 available in irs publication 527. Rental property " Are irs rules for taking charitable deductions on one s income tax any different White living overseas than they Are stateside a charitable contribution is a  or gift to. Or Lor the use by a qualified organization. In general foreign charities and religious organizations do not qualify because they have not been approved under Section 170 c of the internal Revenue code you May deduct contributions of irs approved agencies these include . Churches the salvation army red crass care Goodwill industries United Way boy scouts girl scouts boys and girls club of America the combined Federal Campaign . Veterans groups nonprofit schools and hospitals civil. Defense organizations Public Parks and recreation facilities. Charitable contributions should be deducted on schedule a As an itemized deduction. Who qualifies As a dependent of a service member marries a nonresident alien who already has children can the children be claimed As dependents in order for you to claim another person As an exemption on your tax return five tests for dependency Musl be met. These Are the member of household or relationship test the citizenship Tesi the joint return test the Gross Iconie test and the , member of household or relationship test to meet this test a person must live Wilh you for the entire year As a member of your household or a related to you. Citizenship test to meet the citizenship test a person Musl be a . Citizen resident or National or a resident of Canada or Mexico Tor some part of the Calendar year in which your tax year begins children usually Are citizens or residents of the country of their parents joint return test even if Hie of rear dependency tests Are met you Era not allowed an exemption or your dependent if to or she files a join return. For example you supported your daughter Lor the entire year while her husband was in the armed forces. The couple files a joint return. Even though All the other tests Are met you May not Lake an exemption Tor your daughter Gross income test generally you May not Lake an exemption Tor a dependent if that person had Gross income of $1,950 or More Lor the year. This Tysl does not apply if the person is your child and is either under age19prastudeni  you must provide More than half of a person s Tola support during the Calendar year to meet the support last. You figure whether you have provided Moro than Hall by comparing the amount you contributed to the person s support with the entire amount of support received from All sources this amount includes Tho person s own funds used for supped you May not include in your contribution any part of the support that is paid for the child Wilh the child s own wages Rome tar All five tests must to met in order to claim an individual As a dependent in 1988, each dependent exemption reduces your taxable income by $1,950. Ii you Ere entitled to claim an exemption or a dependent such As your child on your a slurp that dependent cannot claim a personal exemption on his or her own tax return. 20 a traditional Rule of thumb is that no More than one of three americans overseas who should Lite . Income taxes actually does so. Is the percentage of compliance among the military better than that the internal Revenue service does net keep exact percentages on How Many military personnel overseas mail lobe income tax returns but officials with inti Federal Agency in Bonn say the percentage is extremely Small. Compliance among military personnel is among the strongest of any category Legal affairs officers with the , army and air Force Echo those sentiments. Our people Are used to following the rules said one air Force Legal officer. " is tax & financial planning Ulde 9