European Stars and Stripes (Newspaper) - January 30, 1991, Darmstadt, Hesse                                Troop get More time to pay less tax tax obligations for the military for the tax year 1990 because certain military payments Are not taxable service members Are sometimes confused As to what is and Isnit taxed. Taxable income a Active duty Paya Reserve training pay a a re enlistment bonuses. A service Academy pay a amounts received by retired personnel serving As instructors in Junior Roth programs a Lump sum payments upon separation or release to inactive duty a military retirement pay based on age or length of service a imminent danger duty pay. A enlisted foreign duty pay a family separation pay for More information obtain internal. Revenue service pub. 3, tax information for military  items a Basic quarters allowance. A variable housing allowance. A Basic subsistence allowance a uniform allowance a family separation pay a. A a other quarters Cost of living allowances q moving and storage expenses provided in kind or reimbursements for actual expenses for permanent change of station moves a benefits under servicemen s group life insurance o death gratuity pay not More than $3,000 a forfeited pay but not fines a certain disability retirement pensions department of veterans affairs benefits including a insurance dividends. A enlisted combat pay a officers combat pay 1st $500 exempt 3&s Susan  by Randy Mcclain financial writer i n the Gulf Region these Days talk of form 104qa takes a Back seat to the More immediate issues of scuds the impending ground War and mias. Nevertheless word that military pay in the combat zone will be tax free during the War is Welcome news. A a a. President Bush s order last week dealing with. Combat pay exclusions Means that military pay. During the untied states Iraq War will be treated much the same As it was during the Vietnam War. Enlisted personnel will not have to pay income taxes on any of their military pay while serving in the Middle East White officers will be allowed to exempt up to $500 a month from taxation. Effective last week the military stopped withholding Federal taxes from the pay of troops serving in the combat zone. In addition anyone who served in the theater since aug. 2 will not have to file tax forms until six months after their return. Kent Klaus of the . Accounting firm Arthur Andersen amp co., said much of the legislative history on combat pay stems from the Vietnam War. Quot one such piece of legislation conferred combat zone tax benefits on members of the armed forces. Even in some cases where a servicemen Berdion t actually serve in Vietnam Quot Klaus said. That Rule applied to individuals who came under the risk of hostile fire while supporting vietnamese military operations even though they were technically outside the country in coastal Waters . The tax rules announced by Bush for operation desert storm Are very similar. Bush has designated the entire arabian Peninsula its airspace and adjacent Waters As a combat zone. The combat zone stretches to include . Service members serving in the persian Gulf the red sea the Gulf of Oman part of the arabian sea the cult of Aden and the entire land areas of Iraq Kuwait saudi Arabia Oman Bahrain Qatar and the United Arab emirates. A ,. A a a. The lax order is retroactive to Jan 1 7, when operation desert storm was launched to drive occupying iraqi forces out of Kuwait. R the $500 monthly ceiling of tax free income for officers also Dales from the Vietnam War and there has been some movement in Congress to increase it. One other special tax code provision available to troops and government civilian employees in the Gulf. Region Grants special Breaks to those taxpayers killed. In com hat. A. V if a government civilian employee or. Servic member is killed As a result of military action that person s family or estate is not liable for Federal taxes for the year in which the person died or for the. Previous year. In addition for military personnel the tax code states that any unpaid tax liabilities that existed prior to a person s death also Are suspended. Also it May be possible to delay Colter tin of any Back taxes owed to the irs by National guard or Reserve troops called to Active duty Over the last few weeks. A. A a Quot a a a a a a delay in payment of Back taxes is possible in hardship situations such As when a reservist takes a big pay Cut upon entering military service. Klaus said the hrs will ask for proof of lower pay such As pay slips and other supporting documents but the Agency is expected to be lenient in Light of the massive War Effort  editor5 George Manes Rosemary Sawyer design Peter Jaeger financial writer Randy Mcclain reporters Crystal Laurcan Randy Pruitt Chuck Vinch free tax services for armed forces in  Sam gives Gulf troops a filing  advice for these parlous  War la Law still helps  your financial House in order in  for developing the savings  taxes who wants what and How much. Wednesday january 30, 1991 a amps financial planning guide