Thursday, January 04, 2007


HERO Act expands IRA eligibility for deployed servicemembers: "This tax season, another question will likely be high on a Soldier's list: What is the HERO Act, and how can it work for me?

The HERO Act
The answer, according to the Internal Revenue Service, is that members of the military serving in Iraq, Afghanistan and other combat zones can now put money into an individual retirement account, even if they received tax-free combat pay.

Under the Heroes Earned Retirement Opportunities Act, signed into law on Memorial Day, servicemembers can now count tax-free combat pay when determining whether they qualify to contribute to either a Roth or traditional IRA. Before this change, military members whose earnings came entirely from tax-free combat pay were generally barred from using IRAs to save for retirement. "

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