Money Management

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Q. Before my spouse deploys, what should we do to get our finances in order?

Before your spouse deploys, make sure that you have power of attorney so that you can make financial decisions in his or her absence and perform basic financial activities such as accessing a bank account or filing an insurance claim.

Review your ownership documents to make certain both you and your spouse's names are on all paperwork. This will make it easier for you to make necessary financial and property decisions while your spouse is away. Don't forget your car loan, mortgage, insurance policies, even utilities.

Make sure that you and your spouse have a valid and updated will. If you have children, name a guardian and spell out in the will how property should be distributed.

Q. Are there any tax benefits of military service?

About one million members of the military will be eligible on their tax returns for the Earned Income Tax Credit (EITC). That means they can exclude nontaxable income, like supplemental pay for housing and combat pay, when calculating eligibility for the credit. Credits are much more valuable than deductions because they reduce your tax bill dollar for dollar. If your EITC exceeds the amount you owe in taxes, you'll get a check for the excess credit. Also, you can get free tax help from the IRS Volunteer Income Tax Assistance program, available at military bases around the country.

Q. What if we fall behind on our mortgage or rent while my spouse is on active duty?

The Servicemembers' Civil Relief Act of 2003 helps those on active duty as well as their families. Under the act, lenders are advised to reduce rates on mortgages to no more than 6 percent for members of the military on active duty. The act also prohibits lenders from foreclosing against military personnel during and immediately following active duty – that means that you will keep your house, even if mortgage payments are delayed. In addition, it helps you if you are renting by ensuring that they can not evict you from housing. The act also allows military renters to end leases without penalty if it best serves their interests.

Protection under the SCRA must be requested while in or soon after your active service. You must also show that military service affected your ability to pay your rent or mortgage. For more information on the Servicemembers' Civil Relief Act, click here or contact us and we'd be glad to answer your questions.