Miscellaneous

The IRS is providing help to the victims of Hurricane Sandy. Special tax relief and assistance is available to taxpayers in the Presidential Disaster Areas.
So far, the IRS filing and payment relief applies to the following localities identified by FEMA for Individual Assistance due to Hurricane Sandy:
In Connecticut: Fairfield, Middlesex, New Haven, and New London Counties and the Mashantucket Pequot Tribal Nation and Mohegan Tribal Nation located within New London County;
In Maryland: Somerset County
In New Jersey: Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union and Warren;
In New York: Bronx, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Sullivan, Suffolk, Ulster and Westchester;
In Rhode Island: Newport and Washington counties.
Other locations may be added in coming days based on additional damage assessments by FEMA.

For information on disaster recovery, individuals should visit disasterassistance.gov or http://www.irs.gov/uac/Newsroom/Help-for-Victims-of-Hurricane-Sandy

Yes. Members of the armed forces serving in a combat zone which is considered tax free can contribute to Traditional and Roth IRA plans.

The four branches of the US military operate their own service academies. They are all four-year institutions. Competition to get into these schools is highly competitive. Students become commissioned officers immediately upon graduation. Those who are accepted get full scholarships and a small monthly allowance. For more information, speak to your HS guidance counselor or contact: The Coast Guard Academy in Connecticut at 800-883-8372, The U.S. Military Academy at West Point, N.Y. at 800-822-8762, The Naval Academy in Maryland at 800-638-9156, The Air Force Academy in Colorado at 800-443-9266.

The Reserve Officers' Training Corps. (ROTC) provides students with money for college. Generally, the arrangement is, in exchange for the college education, the student must make a commitment to join the armed services after graduation. After graduation, students become commissioned officers in the Marine Corps, Army, Navy or Air Force. ROTC scholarships pay for tuition, fees and books for all four years of college. Lesser programs are available for students who want to make lesser commitments.

Your service branch must certify your entitlement on the Form W-2 it provides you. If you believe you are entitled to the exclusion, but it is not reflected on your Form W-2, ask your service branch to issue a corrected Form W-2.

Payment for service outside a designated combat zone is not excluded from income unless the pay is hostile fire/imminent danger pay for serving an area in direct support of military operations in the combat zone. The Department of Defense certifies areas that meet these requirements. Hostile fire/imminent danger pay received for service in a non-certified area is taxable. Generally, hostile fire/imminent danger pay is included on Forms W-2 for persons who do not qualify for the exclusion and not included on Forms W-2 for persons who do qualify for the exclusion.

Yes. Military pay received by enlisted personnel who are hospitalized as a result of injuries sustained while serving in a combat zone is excluded from gross income for the period of hospitalization, subject to the 2-year limitation provided below. Commissioned officers have a similar exclusion, limited to the maximum enlisted pay amount per month. These exclusions from gross income for hospitalized enlisted personnel and commissioned officers end 2 years after the date of termination of the combat zone.

Yes. The combat zone includes the airspace over it, so you are serving in the combat zone. See Q&A-2 above for a discussion of the amount of your military pay that is excluded.