Tax credits, deductions save Air Force members money Published Feb. 26, 2007 By Maj. Lawrence Spinetta 1st Operations Support Squadron director of operations LANGLEY AIR FORCE BASE, Va. (AFNEWS) -- It's tax season again and new tax codes have changed some credits and refunds. Knowing what credits and deductions to claim allows Airmen to keep more of their own money. The Heroes Earned Retirement Opportunities, or HERO Act signed by President George W. Bush May 29, 2006 allows military members to count tax-free combat pay when determining whether they qualify to contribute to either a Roth or traditional individual retirement account. Under previous law, members whose earnings came entirely from tax-free combat pay were barred from contributing to IRAs. Additionally, the HERO Act allows members of the armed forces to retroactively make retirement contributions for tax years 2004 and 2005. Those eligible have until May 28, 2009, to make these special back-year contributions. Another important retirement tax credit is the Retirement Savings Contributions Credit. The IRS will give taxpayers a credit up to $1,000 for making eligible retirement contributions, such as to the Thrift Savings Plan and IRAs, if their adjusted gross income is less than $25,000 for single taxpayers or less than $50,000 for married filing jointly. Married couples can claim the credit for each spouse and can receive up to $2,000. This year, the IRS will also refund between $30 and $60 to everyone who paid a long-distance telephone bill between March 2003 and August 2006. The refund amount reflects long-distance phone tax paid. These are all tax breaks Uncle Sam gives for members of the armed forces. The Armed Forces' Tax Guide, Internal Revenue Service Publication 3, is a good source of more information for Airmen to maximizing their tax refunds. Comment on this story (comments may be published on Air Force Link) Click here to view the comments/letters page