Question

1. How does a change of duty station to a foreign location change the deduction of allowable moving expenses for a service member?
2.What are the qualifications to be eligible for a Health Savings Account ( HSA) deduction?
3. Who is eligible to take an above the line AGI deduction for educator expenses and what is the maximum amount of the permitted deduction?

Answer 1

1: If you're a member of the Armed Forces on active duty, you may be eligible to deduct moving expenses if your move was due to a military order and permanent change of station. You may be able to deduct your unreimbursed moving expenses for you, your spouse and dependents.

You can't deduct any moving expenses covered by reimbursements from the government (or paid for directly by the government) that are excluded from your income.

Permanent change of station – This includes a move from your home to your first post of active duty, a move from one permanent post of duty to another, and a move from your last post of duty to your home or to a nearer point in the United States. The move must occur within 1 year of ending your active duty or within the period allowed under the Joint Travel Regulations.

2:

• Must be 18 years of age or older
• Must be covered under a qualified high-deductible health plan (HDHP) on the first day of a certain month
• May not be covered under any health plan that is not a qualified HDHP
• • There are limited exceptions to this
• Must not be enrolled in Medicare (the healthcare component of the Social Security program)
• May not be claimed as a dependent on another individual's tax return

If you do not live in the United States, you can still open an HSA under certain circumstances

• You are a US citizen and are paid in US dollars or
• You are employed in the US and are paid in US dollars
• You will need a US-based Social Security Number/TIN to open an HSA - this is generally necessary to work in the US as well.

3: You're an eligible educator if, for the tax year you're a kindergarten through grade 12 teacher, instructor, counselor, principal or aide for at least 900 hours a school year in a school that provides elementary or secondary education as determined under state law.

Qualified expenses are deductible only to the extent the amount of such expenses exceed the following amounts for the tax year:

• The interest on series EE and I U.S. savings bonds that you exclude from income because you paid qualified higher education expenses,
• Any distribution from a qualified state tuition program that you exclude from income,
• Any tax-free withdrawals from your Coverdell education savings accounts,