FORT RUCKER, Ala. - A new tax law helps military spouses be more selective about where to file state taxes. The Military Spouses Residency Relief Act was signed last November by President Barack Obama and gives spouses more choices regarding taxation.
With tax season running now through April 15, everyone may have questions about other changes and filing options. To help the process run smoothly, installation Legal Assistance staff are here to help.
MSRRA amends the Servicemembers Civil Relief Act to "provide that a military spouse does not lose or acquire a residence (or) domicile for tax purposes by reason of being absent from or present in a state solely to be with a Soldier ... who is present in the state on military orders," said Paralegal Assistant Tod Clayton.
The act allows husbands and wives a choice to file taxes in different states, said Capt. David Pardo, Legal Assistance chief. For example, if a military Family moves to Fort Rucker from Florida and the spouse works here, but maintains his or her residency in Florida, he or she may file taxes in either state. Several states - including Florida - have no income taxes, so the spouse would benefit from filing there. However, spouses whose states of residency charge higher income taxes than Alabama would benefit from filing here, he added.
"It's a way to give military spouses a tax break," he said.
Military spouses may need to present ID cards and their Soldiers' orders when filing with MSRRA, Clayton said.
Spouses cannot simply pick and choose desired residencies to reap the program's benefits, he noted. They must take actions such as obtaining driver's licenses or registering to vote as well as claiming intents to return to their states of choice.
Because MSRRA is new, Clayton said the government is still working out some issues, including how applicable refunds are returned to tax payers.
State taxes and laws vary greatly regarding MSRRA, and it is spouses' responsibility to find out how the new law applies to them, he said.
Since even basic filing can sometimes be confusing, Legal Assistance officials offer guidance and tips for this year's tax season.
Legal Assistance staff provides free basic tax preparation services by appointment for all ID card holders, Clayton said, noting his employees do not file business or rental property taxes.
Those filing at home may access software at www.IRS.gov/freefile. Clayton said federal returns are free for many individuals, however most sites charge to file state taxes.
Individuals who use outside tax preparation services should research businesses before choosing to ensure legitimacy. Easy ways to find credible companies include asking friends for references or researching through the Better Business Bureau at www.bbb.org, Clayton said.
Regardless of filing methods, individuals need to gather specific information before attempting the task. Necessary paperwork includes W-2s from all employers, 1099 forms including retirement, interest or dividends forms, Social Security cards, bank routing and account numbers for electronic refunds, powers of attorney and any other applicable documents, he said.
A mistake many military members make is forgetting W-2 forms from do-it-yourself moves. Any money earned from this process must be claimed as income, Clayton added.
After proper documentation is obtained and forms filled out, Clayton warns self-filers to double check their work before submitting online forms.
"If you use free Internet Web sites, check your work. Pay attention to detail. Be cautious and read it before you submit it," he said.
Paper tax forms are available at Bldg. 5700, near Rm. 371F, or at the Internal Revenue Service Web site. For more information, or to make an appointment with Legal Assistance, call 255-3482.