Military Breaks

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 activeduty 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. *** Q Are initial public offerings (IPOs) good investments? — N.O., Dalton, Georgia A They can be, but it’s generally best to steer clear of newly minted shares of stock until they’ve had a chance to settle down. IPOs can be volatile and frequently don’t fare too well in their first year. And it’s mainly well-connected investors who get shares at their low initial prices; the rest of us end up buying later, often after prices have risen considerably. Facebook, for example, debuted on the market in 2012. Shares were initially priced at $38 apiece, but after about a month they were near $30 and a year later near $26. (Of course, they were recently near $167.)