Preparation key in filing taxes correctly, easily Published Feb. 11, 2008 Hurlburt Field Tax Center HURLBURT FIELD, Fla. -- Tax season is now in full swing. Filing taxes can cause anyone headaches, but for military members and their families, deployments and other considerations can make things a little trickier. Taking the time to figure out a plan of attack before filing can prevent problems down the road. Choosing a filing method Electronically filed returns are checked for errors and necessary information, increasing the accuracy of the return and reducing the need for correspondence with the Internal Revenue Service to clarify errors or omissions. Once the return is accepted for processing, the taxpayer is notified electronically that the IRS received the return. Generally, when returns are e-filed, the refund is issued in about half the time of a paper return. Those who choose direct deposit typically get their refund in even less time. E-filed returns can also be made early with the option to wait and pay any balance due by April 15. The balance can be paid electronically with a credit card, through an electronic funds withdrawal, or, in some cases, the Electronic Federal Tax Payment System. Choosing the simplest tax form The three forms used for filing individual federal income tax returns are Form 1040EZ, Form 1040A and Form 1040. Using the simplest allowable form will reduce the chance of an error that may cost the individual money or delay processing of the return. Individuals eligible to use Form 1040EZ, the simplest form, are those who: - Have an income below $100,000 - Have a filing status of single or married filing jointly - Are under age 65 and not blind - Are not claiming any dependents - Have an interest income of $1,500 or less Individuals eligible to use Form 1040A are those who: - Have a taxable income below $100,000 - Have capital gain distributions - Claim certain tax credits - Claim deductions for IRA contributions, student loan interest, educator expenses or higher education tuition and fees Those who cannot use either a 1040EZ or 1040A probably need Form 1040. Taxpayers must file form 1040 if they: - Have a taxable income of $100,000 or more - Claim itemized deductions - Are reporting self-employment income - Are reporting income from sale of property Calculating deployment extensions The deadline for filing tax returns, paying taxes, filing claims for refund and taking other actions with the IRS is automatically extended if the taxpayer is serving in a combat zone. These rules apply to the individual's stateside spouse as well, if filing a joint return. The duration of this extension can be a bit complicated to calculate, but here are the general guidelines: - The individual is given 180 days to file from the time they leave the combat zone or are discharged from the hospital after receiving treatment from combat related injuries - The number of days the individual spent in the combat zone before the filing deadline of April 15 is also added to the extension time. For example, if the member deployed March 1, they would receive the 180-day extension plus the 46 days they were in the combat zone before the filing deadline. The extension total in this case would be 226 days Signing joint returns The non-military spouse can file a joint return without the servicemember's signature. This can be done by using an IRS power of attorney, Form 2848, a military power of attorney that authorizes tax actions or by submitting a signed statement indicating the spouse is currently serving in a combat zone. These returns can be e-filed, but the tax preparer will need to attach the power of attorney or writing to a Form 8453 and send it to the IRS. Determining combat zone tax benefits Active duty members and Reservists who serve in a combat zone might be eligible for tax benefits regarding earned income tax, individual retirement accounts and thrift savings plan contributions. Most retirement contributions will be treated differently while in the combat zone, and regular contribution limits don't apply. Reserve personnel receiving compensation from their civilian employer, also known as differential pay, in particular need to consult IRS Publication 3, Armed Forces Tax Guide, to ensure they understand their tax liability. Local tax centers have information on combat zone tax benefits and should be consulted before filing a return. For more information or to make an appointment at the Hurlburt Field Tax Center, call 884-7542.