Many tax benefits are available for military
Motley Fool
Q: Do military people get any tax breaks? — D.L., Keene, New Hampshire
A: They do. For starters, some can exclude combat pay and other allowances and payments from taxable income, while combat pay can count as earned income for the Earned Income Tax Credit. Some reservists’ travel expenses are deductible, as are some moving expenses for active-duty personnel moving to a new permanent station. Families of fallen soldiers can take advantage of tax-favored accounts, and there is tax forgiveness for those who die in action, while in active service in a combat zone or from an injury received in a combat zone. Those serving in a combat zone and certain others can also have their tax deadlines automatically extended by 180 days. IRS Publication 3, “Armed Forces’ Tax Guide,” will tell you much more.
The Soldiers’ and Sailors’ Civil Relief Act offers some protections against eviction, the delay of civil court actions, a cap on mortgage rates and reduced interest rates on credit card debt.
Learn more at defense.gov, irs.gov and Fool.com/taxes.
Fool’s School: A matter of trusts
If you hold meaningful assets, it’s important to have some kind of estate plan in place — even if you’re still relatively young. Trusts can help with that.
While trusts are commonly used by the wealthy, they can serve the middle class, too. A trust involves assets being held by one or more trustees for the benefit of one or more beneficiaries, and it can be specific about when the assets go to the beneficiaries. (For example, it might be upon your death, or when an heir turns, say, 35.)
Trusts can be used for many purposes, such as dividing ownership of property. They can be preferable to wills sometimes, too. That’s because they can take effect immediately, handling circumstances that wills cannot. For instance, if you’re seriously injured, a trustee may take over your finances until you’re able to assume responsibility again. Trusts can usually be changed without the formalities required for altering a will, and they can help you postpone or avoid some taxes. Assets that pass through trusts generally don’t go through probate, so they can help you avoid unnecessary delay and expense, and can keep your arrangements more private.
There are downsides to trusts, though. For starters, they’re often more complicated to create than a will. (A poorly drafted trust can be nearly impossible to execute.) Many professionals charge much more to draft a trust than a will, though it can still be worth the money.
It’s also not always easy to determine when establishing a trust is your best move. Read up on the topic before deciding, and consider consulting a professional or two.
Name that company
I trace my roots to 1886, when a traveling book salesman recruited women to sell perfumes. Today, I offer scores of products, with names such as Skin-So-Soft and Advance Techniques, and my sales force of independent representatives numbers around 6 million. I can boast of 90 percent brand recognition in most major markets worldwide. In 2016, I spun off my business in the U.S. and Canada into a new, privately held entity that added the word “New” to my long-standing name. I sell housewares and jewelry, but beauty products are my bread and butter. Who am I?
Last week’s answer
I trace my roots to 1914, when an immigrant in Minnesota started ferrying iron miners to and from work, cramming 15 into a car built for seven and charging 15 cents per ride. Today, I’m America’s largest intercity bus company, reaching more than 3,800 locations in North America. I transport more than 17 million riders annually, and I deliver packages, too. I also operate the BoltBus business in parts of the U.S. My fleet features about 1,600 vehicles, and I travel more than 5 billion miles per year. Don’t let my logo bite you. Who am I? (Answer: Greyhound Lines)