Feb 15, 2009 ROA Newletter

Here are some interesting bits of information found in the Reserve Officer Association Newsletter, Feb 15, 2009....

The final stimulus package agreed to by House and Senate conferees was pared back from what both the House and Senate had passed earlier, but is still a massive $789 billion package that includes funding for a variety of initiatives that will affect the military community in one way or another. Following is a summary of selected provisions:
• Federal Income Tax Rebate: Working employees (including the self-employed) would see a reduction in federal income tax withholding and liability of up to $400 (single) or $800 (married filing joint return). This tax credit would be calculated at 6.2% of earned income, up to the capped amount. The credit would phase out for taxpayers with adjusted gross incomes above $75,000 (single) or $150,000 (married joint return).
• Special Payment: Social Security annuitants, disabled veterans, and certain others would be eligible for a one-time $250 payment. Anyone who is eligible for this payment and also eligible for the federal income tax rebate mentioned above would have the $250 deducted from the latter in determining the end-of-year tax liability.
• Military Homeowner Assistance Program (HAP): HAP benefits (normally payable only at BRAC locations) are extended to certain military homeowners who bought homes before 1 JUL 06 and who sell the homes before 30 SEP 12. To qualify the person must have received PCS orders or must have incurred a service-caused condition during a deployment in that period that caused disability retirement. For a member who died during a deployment, the surviving spouse is eligible. The HAP authorizes the government to reimburse the homeowner for a loss on the sale up to 95% of the original value, or to purchase the home for up to 90% of the original value. Market values are determined by the Defense Department.
• Education Tax Credit: Taxpayers with college education expenses would receive a tax credit of up to $2,500 for the cost of tuition, books, and related expenses during 2009 and 2010. The credit would be 100% of the first $2,000 and 25% of the next $2,000. The credit would phase out for taxpayers with adjusted gross incomes above $80,000 (single) or $160,000 (married).
• First-time Homebuyer Tax Credit: For 2009, the credit would be 10% of the purchase price, up to a maximum for $8,000. The previous requirement for homeowners buying homes after January 1, 2009 to pay the money back would be removed, unless the house is sold within three years of purchase.
• Vehicle Sales Tax Deduction: Taxpayers purchasing a new car, light truck, RV or motorcycle in 2009 will be able to deduct state and local sales and excise taxes paid on the vehicle. The deduction will phase out for taxpayers with adjusted gross incomes above $125,000 (single) or $250,000 (married).
• Incentives to Hire Unemployed Veterans: Businesses would get a tax credit of 40% of the first $6,000 in wages for hiring unemployed veterans who are within 5 years of leaving active duty and who have drawn unemployment compensation for more than 4 weeks during the year before being hired

VA HEALTH CARE FUNDING UPDATE 18: THE chairmen of the House and Senate veterans’ affairs committees took a major but far from final step 12 FEB in fulfilling the top request from veterans’ service organizations: They sponsored legislation (S.423) that would provide funding a full year in advance for Veterans Affairs Department health care. House Veterans Affairs Chairman Bob Filner (D-CA 51st) bill H.R.1016 is the corresponding house legislation. Having Filner and Sen. Daniel Akaka (D-HI) on board does not guarantee the change in the budget process will take place, but it at least ensures the issue will receive high-level attention. It doesn’t hurt that President Obama said during the presidential campaign that he also supports the idea, which could help VA weather Congress’ near-constant failure to pass an annual budget on time. The support from Filner and Akaka comes as no surprise. The two chairmen announced in SEP 08 that they supported the idea, but there was not enough time remaining in the legislative session for their legislation to be considered then. The idea is to help VA avoid the uncertainty that comes from not having a budget approved on time. In 19 of the past 22 years, Congress failed to approve a VA budget by the start of the fiscal year on 1 OCT. On average, the final funding bill is approved three months late. The Filner and Akaka legislation would have Congress approve the 2011 veteran’s health care budget this year, when it also passes the 2010 budget. Then, beginning in with the 2012 budget, funding levels for veterans health care programs — but not the rest of the VA budget — would be finalized one year before the VA needs the money. Congressional aides, speaking on the condition of anonymity, said advanced appropriations would not make Congress get things done on schedule. Instead of approving health care budgets 12 months in advance, it is more likely funding levels would be approved nine to six months in advance — but that would still be an improvement over late budgets. But a change in budget procedures that would have the veteran’s health care budget approved before any other federal spending is not a sure thing. Proponents of other programs like education, agriculture and defense might argue that they also deserve advance funding, aides cautioned. “Everybody wants to think their program is the priority. Nobody wants to be second when it comes to dividing up the budget,” said a House aide. Veterans groups, however, are happy Filner and Akaka are backing their cause. “Finally, Congress is getting ahead of the curve and sufficiently planning the VA health care budget so that veterans are not left waiting,” said Paul Rieckhoff of Iraq and Afghanistan Veterans of America. The legislation is a major priority for the American Federation of Government Employees, which represents VA health care workers. The union said that inconsistent funding for VA makes it difficult to hire doctors and nurses when necessary, or make long-range plans for the health care workforce. "We can't hire anyone [in the second half of the year] because we don't know what the budget's going to be," said J. David Cox, AFGE's national secretary-treasurer. "Then, we get our funding in February, and we need to hire everybody, but nurses aren't coming out of school then. They're coming out in May and June." The union also is planning to push for expanded collective bargaining rights for VA registered nurses, physicians' assistants, and dentists. Cox said the union would advocate strongly for both the funding legislation and the collective bargaining legislation. The National Federation for Federal Employees also is supporting the collective bargaining bill, saying that increasing workers' rights and input would improve conditions at VA. Congress and the Government Accountability Office have expressed concern about growing vacancy rates in the VA's health system, especially among certified registered nurse anesthetists, whose vacancy rate is 13%. At 43 medical facilities GAO examined nationwide, 15 said that 40% or more of their CRNA positions were vacant. [Source: NavyTimes Rick Maze article 12 Feb 09 ++]

VA EMERGENCY CARE UPDATE 03: On 19 FEB U.S. Senator Daniel K. Akaka (D-HI), Chairman of the Veterans’ Affairs Committee, introduced the Veterans’ Emergency Fairness Act of 2009 (S.404). This bill would enable the Department of Veterans Affairs (VA) to reimburse veterans enrolled with VA for the remaining costs of emergency treatment received outside of VA’s health care system if the veteran has outside insurance that only covers part of the cost. Under current law, VA can reimburse veterans or pay outside hospitals directly only if a veteran has no outside health insurance. “Because insurance may not cover all costs, a trip to the ER can leave insured veterans financially crippled. My bill would enable VA to fill the gap for veterans whose outside insurance does not meet their needs,” said Akaka. In addition to reimbursing veterans for future costs of emergency care, the bill would allow the Secretary of Veterans Affairs to provide retroactive reimbursements back to May 2000 when VA was first authorized generally to cover the cost of outside emergency care for veterans enrolled with VA for their care. [Source: Sen. Akaka press release 11 Feb 09 ++]

TAX TIPS 2008: Federal lawmakers simply cannot resist tinkering with the tax code. By one estimate, more than 500 tax law changes were made last year alone. Many of the 2008 changes were made in connection with the slowing economy in general and the housing crisis in particular. But many tax-law tweaks last year also were in areas that seem to get constant attention on Capitol Hill. Such revisions of existing laws often leave taxpayers feeling like characters in an IRS version of the movie "Groundhog Day," each year facing essentially the same tax challenges. The good news is that such "tax script" revisions are at least somewhat familiar. The better news is that these rewrites, as well as some totally new tax laws, offer ways to trim tax bills and provide a happier ending to your 2008 tax-filing circumstances. Among the most persistent recurring tax laws are those known as extenders. The name comes from the fact that these tax breaks technically are temporary. But Congress usually extends a handful of particularly popular provisions for another year or two. Last year was no exception. The laws that were given new life in 2008 include:• Tuition and fees deduction -- Up to $4,000 of qualified college tuition and fees paid last year can be deducted.• Educator deduction -- Teachers and other qualified educators can get a tax deduction for up to $250 spent in 2008 on classroom supplies.• State and local sales tax write-off -- If you paid more state and local sales taxes than state income tax last year, the option to deduct the sales tax amount as an itemized expense also was extended. Although these deductions are still temporary, when Congress renewed them in 2008, they also extended the tax breaks through 2009. So this year at least, we won't have to wait for Capitol Hill to rewrite this part of the usual tax script. In addition to the new 2008 tax code changes and prior year carryovers, many pre-existing laws have new dollar amounts this filing year, thanks to inflation adjustments. For details on these tax issues refer to "Old tax laws, new amounts." at http://www.bankrate.com/caf/itax/news/taxguide/20090130-changes-to-old-tax-laws-a1.asp?caret=1r . Last year's economic stimulus payments, or rebates as they were popularly called, actually were credits against 2008 income. And some people may be able to cash in on the rebates this filing season by claiming the Recovery Rebate Credit. This new credit, available only on 2008 returns, could help filers who last year did not receive the maximum credit of up to $600 for single taxpayers, $1,200 for married couples filing jointly. Changed tax circumstances, such as a new child in the family, also could get you a bit more rebate money on your 2008 return. The Recovery Rebate Credit can be claimed on all three versions of the 1040. You'll need to know how much you received last year in order to calculate what you're eligible for now. Some other changes you might review to see if they could impact on your 2008 tax liability are:• First-time homebuyer's credit• Standard property tax deduction• Surviving spouse home sale exclusion• Housing tax-break holdovers• AMT inflation adjustments• Zero capital gains• 'Kiddie' tax• Required retirement distributions[Source: ConsumerAffairs.com Bankrate's 2009 Tax Guide Kay Bell article 5 Jan 09 ++]

TAX TIPS 2008 UPDATE 01: The dismal housing market prompted lawmakers to create the following new tax breaks in 2007 and 2008: • First-time homebuyer credit: Thanks to the Housing and Economic Recovery Act of 2008, some first-time homebuyers can claim a credit of 10% of the home's purchase price, up to a maximum of $7,500. You could qualify as a first-time buyer if you have not owned a home in the three years prior to the qualifying purchase.There is, however, some limitations. The credit phases out for higher-income taxpayers. It is available only for primary homes purchased between 9 APR 08 and 30 JUN 09 and it's not a true credit. The tax break must be paid back, without interest, in equal payments over 15 years. The repayment period begins 2 years after the year in which you claimed the credit. Thus, if you claim the credit on your 2008 tax return, the repayment period begins in 2010 and you must include the first installment as additional tax on your 2010 tax return. If your home ceases to be your main home before the 15-year period is up, you must include all remaining annual installments as additional tax on the return for the tax year that happens. This includes situations where you sell the home or convert it to business or rental property. If you die, any remaining annual installments are not due. If you filed a joint return and then you die, your surviving spouse would be required to repay his or her half of the remaining repayment amount. Refer to Form 5405 for more details. Congress is considering expanding this first-time homebuyer credit.• Standard property tax deduction: The Housing and Economic Recovery Act of 2008 provides a new home-related deduction for taxpayers who don't itemize their expenses. Up to $500 for single homeowners, double that for joint filers, can be added to the taxpayer's standard deduction amount. This option will help homeowners who don't have enough deductions to itemize, but who paid property tax for their personal residence in 2008. The standard property tax deduction originally was for the 2008 tax year only. However, as part of another tax bill enacted a few months later, the tax break was extended to 2009.• Home sale exclusion for surviving spouse: One of life's most difficult decisions is whether to keep or sell a home after the death of a spouse. It also often posed a costly tax dilemma for a widow or widower. Usually, a married couple can exclude up to $500,000 in profit on the sale of their home. When a husband or wife died, the house had to be sold in the year of death for that full exclusion amount to apply. Now, however, a tax law that took effect in 2008 will allow the surviving spouse to claim the $500,000 exclusion as long as he or she sells the home within two years after the spouse's date of death. The widow or widower must remain unmarried and all other tests, such as residency and ownership, also must be met.• Housing break holdovers: Don't forget a couple of real estate-related tax break holdovers that could save eligible taxpayers some money: foreclosure debt relief and deductible private mortgage insurance payments. In late 2007, the Mortgage Debt Forgiveness Act helped ease the double whammy of home foreclosure: losing a residence and then owing tax on any amounts of debt that were written off, or forgiven, by the lender. Now up to $2 million of that amount, known as cancellation of debt income, is not taxed. The law applies to home foreclosures, short sales or loan renegotiations from 1 JAN 07, through 31 DEC 12. Some homeowners who must pay private mortgage insurance premiums in connection with their loans also get a tax break. They can claim some of those costs as a deduction on their 2008 returns. This deduction began with the 2007 tax year and was subsequently extended to PMI on new mortgages issued from 2008 through 2010.[Source: ConsumerAffairs.com Bankrate's 2009 Tax Guide Kay Bell article 5 Jan 09 ++]

TAX TIPS 2008 UPDATE 02:• Alternative Minimum Tax Patch: The alternative minimum tax, or AMT, is a parallel tax system created 40 years ago to ensure that the rich had to pay at least some tax. Nowadays, however, more middle-class taxpayers find they are potential AMT payers because the tax is not indexed annually to account for inflation. To keep these filers off the AMT roll, Congress has approved temporary fixes for the tax which increase the amount of income that is excluded from the AMT. The 2008 patch raised the exemptions to $69,950 for a married couple filing a joint return and qualifying widows and widowers, up from $66,250; $34,975 for a married person filing separately, up from $33,125; $46,200 for singles and heads of household, up from $44,350. • Zero Capital Gains: Capital gains tax rates already are lower than ordinary tax bracket rates, but beginning in 2008 some investors will owe no tax on profits from the sale of long-term holdings. Effective 1 JAN 08 the 5% tax rate on qualified dividends and capital gains that applied to taxpayers in the 10% and 15% tax brackets is zeroed out for some. While no taxes generally are good taxes, the zero percent rate does have some limitations. Some young investors are prohibited from taking advantage of the zero-percent option. Some older taxpayers might find untaxed capital gains could produce unexpected taxes on their Social Security benefits. • Required Retirement Withdrawals: The stock market downturn has caused problems for a lot of investors. Particularly hard hit are retirees who depend upon their investments to help meet day-to-day living expenses. Investors age 70½ or older also must factor in mandatory withdrawals, known as required minimum distributions (RMDs) from their tax-deferred retirement accounts, such as traditional IRAs or 401(k)s.To help these older investors weather the market downturn, lawmakers enacted a measure to remove the distribution requirement for 2009. They did not, however, extend the tax relief to septagenarians who had to make RMDs in 2008. Because tax rules allow for a retirement plan owner's first required minimum distribution to be delayed until 1 APR of the year following the one in which they turn 70½, some taxpayers will be making their 2008 withdrawals this year. Don't be confused by the law exempting 2009 required minimum distributions; your 2008 RMD, even if you take it in 2009, is still due. You do, however, get one break. Usually deferment of the first RMD means that you end up taking two distributions in the same year, the one you postponed until April and the current year's distribution due by Dec. 31. But with 2009's withdrawal suspended, you'll only have to take out the 2008 amount. • Kiddie Tax: Before 529 plans and other dedicated education savings accounts were around, parents used to open investment accounts in their children's names. It also provided a way for the earnings to be taxed at the child's lower tax bracket rates. That loophole came to an end with the creation of the "kiddie" tax. This levy kicks in when a child's account earns more than a certain amount ($1,800 in 2008, $1,900 in 2009) and requires that excess earnings be taxed at the parents' highest marginal tax rate, which could be as high as 35%. That rule lasts until the child reaches a certain age, at which time the youngster's lower rates then apply. Originally, the kiddie tax applied until a child turned 14. For the last few years, however, lawmakers have been pushing that age upward. For 2008 tax purposes, the parents' higher rates will be collected on investment earnings until the dependent child turns 19, or 24 if the youngster is a full-time student. Part of the reason for the change was to prevent wealthier parents from taking advantage of another 2008 tax-law change, the zero percent capital gains on lower-income investors.[Source: ConsumerAffairs.com Bankrate's 2009 Tax Guide Kay Bell article 5 Jan 09 ++]

ASBESTOSIS: This, a serious lung disorder caused by breathing in tiny asbestos fibers that can develop into cancer. Once inhaled into the lungs, these fibers cannot be destroyed or expelled by the body. They remain embedded in the lung tissue and cause chronic irritation and inflammation. Over time, as this irritation continues, scar tissue develops and replaces healthy lung tissue. Scar tissue is inflexible and cannot contract and expand, which leads to symptoms of asbestosis. Symptoms begin to appear when lung function has been damaged by asbestos exposure. One of the first signs of asbestosis is when breathing has become noticeably difficult. Many asbestosis patients compare the symptoms they experience to those of asthma. Generally, the first symptom of asbestosis is shortness of breath during physical exertion. As the condition worsens, shortness of breath may be experienced even when resting. Other symptoms of asbestosis include painful breathing and coughing. For further information on symptoms refer to www.asbestos.com/asbestosis/symptoms.php. People with asbestosis may also develop dangerous complications that occur as a result of reduced lung function. These include high blood pressure, heart disease, and buildup of fluid in the lungs. In addition, people who have developed asbestosis may be at risk of other asbestos-related diseases such as mesothelioma cancer. Hundreds of thousands, if not millions of living veterans were exposed to toxic asbestos-containing materials during military service. Most military divisions utilized the caustic substance mainly for insulation purposes, but more than 300 products containing asbestos were used by the military, primarily by the Navy from the 1930s through the 1970s. Every ship and shipyard built by the Navy before the mid-70s was fitted with numerous asbestos-containing materials. These materials were extensively used in engine and boiler rooms and other areas below deck for fire safety purposes. Navy personnel who worked below deck were heavily exposed to asbestos, but all sailors are at risk, as the deadly compound was used in navigation rooms, sleeping quarters, and mess halls. Products such as brakes, gaskets, valves, cements, adhesives, and floor and pipe coverings all contained asbestos. Thus, Navy veterans and shipyard workers are one of the most at-risk groups for developing asbestos-related diseases. More than 30% of Americans beset with mesothelioma (a rapacious cancer that attacks the internal lining of the lungs, abdomen, and heart) were exposed to asbestos during military service. At www.asbestos.com you can review by state shipyards that used asbestos plus other job sites with a risk of exposure. Veterans with asbestos-related illnesses find themselves in a unique and troubling situation, as they virtually have no avenue to seek compensation through the current government system. Ailing veterans are prohibited by law to seek compensation from the U.S. government through the court system. Veterans are allowed to apply for Veteran Affairs (VA) benefits for asbestos-related diseases. If in doubt as to how to proceed the resources and staff (i.e. pro bono) at www.asbestos.com or 1-800-272-3786 can assist veterans in applying for benefits. You can also seek assistance from your local veteran service officer (VSO). Initially, a veteran must provide proof that their disease is asbestos-related and that exposure occurred during military service. If a veteran cannot prove their asbestos exposure is limited and isolated to their military service, they are advised to seek compensation directly from asbestos manufacturers. The VA does not presently recognize mesothelioma as a service-connected medical condition. Thus, even if a veteran has been diagnosed with mesothelioma (of which nearly 100% of all cases are caused by asbestos exposure), the VA may refuse to treat them - unless the veteran can provide proof that the cancer is caused by exposure to asbestos while in service. Diagnosis of asbestos-related diseases is difficult since many of the symptoms are indicative of other disorders. With symptoms ranging from respiratory problems to chest pain, asbestos-related illnesses are often misdiagnosed. The non-specificity of symptoms leads to mistaken diagnosis and consequently allows the diseases to fester and spread. For example, pleural mesothelioma, the most common form of asbestos cancers, demonstrates symptoms such as a persistent cough, night sweats, and fever. Early warning signs such as these are frequently misdiagnosed as pneumonia or influenza, affording the cancer the opportunity to develop and pervade the body. Mesothelioma treatment for asbestos-related illnesses varies depending on the condition. Due to the common late diagnosis of these diseases, treatment is often limited to making the patient comfortable, as curing illnesses caused by asbestos is very rare. [Source: Mesothelioma Cancer Center www.asbestos.com Jan 09 ++]

VETERAN LEGISLATION STATUS 13 FEB 09: Refer to the Bulletin’s Veteran Legislation attachment for or a listing of Congressional bills of interest to the veteran community that have been introduced in the 111th Congress. Support of these bills through cosponsorship by other legislators is critical if they are ever going to move through the legislative process for a floor vote to become law. A good indication on that likelihood is the number of cosponsors who have signed onto the bill. Any number of members may cosponsor a bill in the House or Senate. At http://thomas.loc.gov you can review a copy of each bill’s content, determine its current status, the committee it has been assigned to, and if your legislator is a sponsor or cosponsor of it. To determine what bills, amendments your representative has sponsored, cosponsored, or dropped sponsorship on refer to http://thomas.loc.gov/bss/d111/sponlst.html. The key to increasing cosponsorship on veteran related bills and subsequent passage into law is letting our representatives know of veteran’s feelings on issues. You can reach their Washington office via the Capital Operator direct at (866) 272-6622, (800) 828-0498, or (866) 340-9281 to express your views. Otherwise, you can locate on http://thomas.loc.gov your representative and his/her phone number, mailing address, or email/website to communicate with a message or letter of your own making. Refer to http://www.thecapitol.net/FAQ/cong_schedule.html for dates that you can access your representatives on their home turf.