By Debbie Gregory

VAMBOA’s members are servicemembers, veterans and spouses, and our focus is on their businesses.   But as we are in the midst of the tax season, we thought it might be helpful to include some personal tax tips for military personnel.  Often times, business owners place their businesses first and their personal finances last.

The first step to filing taxes is to determine your gross income. Members of the Armed Forces receive many different types of pay and allowances, some that are taxable and some that are excluded. Excludable items are not subject to taxes, however, they still may still have to be shown on your tax return.  

Unless the pay is for service in a combat zone where special rules apply, you must include these items when adding up your annual gross income:

• Basic Pay, which includes: active duty, back wages, drills, attendance at a designated service school, training duty and reserve training.
• Special Pay, which includes: foreign duty, hostile fire or imminent danger, nuclear-qualified officers, aviation career incentives, diving duty and special duty assignment pay
• Enlistment/re-enlistment bonuses, accrued leave, allowances paid to high-ranking officers and some student loan repayments are included in taxable income.

The following areas are excludable from gross income:

Basic Allowance for Housing (BAH), Basic Allowance for Subsistence (BAS), Overseas Housing Allowance (OHA) and cost-of-living allowances abroad, travel allowances, moving allowances, family allowances, health coverage, benefits, education allowances, uniform allowances, death allowances, and as previously mentioned, compensation for active service while in a combat zone or a qualified hazardous duty area.

Similar to civilians, you may not have to pay tax on all of the profit realized from the sale of your main home. A deduction of up to $250,000 of gains (or $500,000 if married, filing jointly) is generally available upon the sale of a primary residence in which you have occupies for more than two years. You may also be able to exclude gain from the sale of a home that was used as a rental or business property as long as it meets certain ownership test criteria outlined by the IRS.

When regulations prohibit you from wearing uniforms off duty, you may deduct the un-reimbursed cost and expense of upkeep of the uniforms, including:

Military dress uniforms, utility uniforms, insignia of rank, epaulets, and swords, and Reservists’ uniforms.

VAMBOA hopes that this information has been of value to you.

Veteran and Military Business Owners Association, VAMBOA,

By Debbie Gregory

Veterans are uniquely qualified to secure government contracts due to the skills and experience they obtained during their military careers. Every year, the federal government spends approximately $500 billion on goods and services.  To maintain a level playing field, the Small Business Administration (SBA) works with federal agencies to ensure that at least 23% of all prime government contracts are awarded to small businesses. These are called “set- asides.”

For Service-Disabled Veteran-Owned Small Businesses (SDVOSB), set-aside contracts can present outstanding opportunities.

There are two types of set-aside contracts: competitive set-asides and sole-source set-asides. With competitive set-asides, at least two small businesses may perform the work or provide the products being purchased, the government sets aside the contract exclusively for small businesses. With few exceptions, this happens automatically for all government contracts under $150,000.

Sole-source contracts are the type of contract that may be issued without a competitive bidding process. This usually happens in situations when only a single business can fulfill the requirements of a specific contract.

Pursuant to the SBA website, In order to qualify for the disabled veterans’ business program, your business must:

• Be a small business
• Be at least 51% owned and controlled by one or more service-disabled veterans
• Have one or more service-disabled veterans manage day-to-day operations and also make long-term decisions
• Eligible veterans must have a service-connected disability

The certification process varies depending on the SBA contracting program. In some cases, you may self-represent your business to the federal government as being owned by a service-disabled veteran.  You need to update the socio-economic status section of your business profile at in the System for Award Management (SAM) at http:www.sam.gov.

The VA sets aside contracts for veterans through their Veterans First Contracting Program. Their program is not the same as the SBA’s program. To obtain access to set-aside Veterans Affairs contracts, your business must be verified through the Vets First Verification Program at https://www.va.gov/osdbu/verification/

Veteran and Military Business Owners Association, VAMBOA,

By Debbie Gregory.

Building a solid credit history and maintaining a high credit score can have a dramatic impact on your quality of life and on your Veteran Owned Business. Not only is a high credit score essential for things such as qualifying for a loan or obtaining a credit card, but it is also important for less obvious things such as obtaining cell phone service, renting a car, and maybe even a job.

Your credit score is based on your FICO score, which ranges from 300 to 850, and is based on these factors:

• How much money you owe
• The regularity of your payments
• The types of your credit
• The length of your credit history
• How many credit requests you’ve made.

If you’re at the top with a score between 800 and 850, you have exceptional credit and are considered to be a prime candidate eligible for the lowest interest rates. This is your reward for having a long credit history without any late payments, as well as low balances on your credit cards.

If your score is between 740 and 799, you have very good credit and are considered to be financially responsible.

If your score falls between 670 and 739, you have good credit, and are around the same range as most Americans, who have an average FICO score of 704.

A score between 300 and 579 is a poor rating. And there are those who have no credit. But don’t despair, these scores can improve.

If you need to improve your score, avoid quick-fix efforts which are most likely to backfire. Raising your scores after a poor mark on your report or building credit for the first time will take patience and discipline. If you are having trouble making ends meet, contact your creditors and explain the situation. You may be able to obtain a time extension or fees waived.

Be responsible and don’t over extend yourself, consistently pay your bills on time, and limit the amount of credit you have requested so that you can get started on the right foot or rebuild a damaged credit score.

If you need to establish credit, talk to your bank and see if they will approve you for a small loan or a low-limit credit card. You can make the payments and pay if off improving your score. Many banks that might not approve you for a credit card will do so with a savings account acting as a security deposit with their institution. You can also start with a gas or retail store credit cards too.

Veteran and Military Business Owners Association, VAMBOA,

GSA’s Centers of Excellence Will See Expansion This Year

By Debbie Gregory.

The General Services Administration (GSA) will be refreshing the acquisition model for its Centers of Excellence (CoE) initiative this year as it gears up for IT modernization.

The RFQ includes a challenge question to assess a vendor’s technical capabilities in a functional area; a scenario question to evaluate a vendor’s ability to collaborate with federal employees and other contractors in a cross-functional team; and another factor to test a contractor’s ability to send a response with regards to one functional area. The challenge questions will be available through Google Forms beginning March 28.

The award for the BPA or Blanket Purchase Agreement is valued at $100 million and is set to last for three years from the date of award. The RFQ or Request for Quotation notes this is not a ceiling and the total value can exceed the $100 million without the need to modify the contract.

The program, initiated by the White House’s Office of American Innovation, launched in December, 2017 as a way for GSA and industry to partner on targeted technology overhauls at selected agencies. beginning the process will be the Agriculture Department and the Housing and Urban Development Department.

“The CoEs are focused on establishing a model of private/public relationships for IT modernization efforts that will prove fruitful to both sides of the partnership.  The objective is to obtain and incorporate industry feedback.

According to Bob De Luca who is the Executive Director of the IT Modernization Centers of Excellence at GSA hopes to onboard more agencies this year and at a faster rate.

The next generation of the program will include the original five centers that are focused on cloud adoption, contact centers, customer experience, data analytics and infrastructure optimization in addition to two additional centers for change management and information security. Prospective bidders must hold GSA Schedule 70 contracts for the relevant special item number listed in the document.  The entire package is due by noon on April 1.

Veteran and Military Business Owners Association, VAMBOA,

By Debbie Gregory.

It’s tax time again, and many Americans who are uncomfortable with doing their own tax returns will hire a third party to do them. While there are many legitimate professional tax preparers who have solid reputations, not all tax preparers have your best interests at heart.

For example, the “Go Navy Tax Service” company, which was deemed off limits by the Marine Corps and located near Marine Base Camp Pendleton in California.  It is alleged that this would lure young Marines with promises of free tax preparation and other perks and subject them to high-pressure sales tactics to get them to deposit their refunds into various financial products.

There are very limited requirements for any type of certification, training, registration, or competency testing for tax preparers.  Anyone who is paid to prepare or assist in preparing federal tax returns must have a valid Preparer Tax Identification Number but that is about it.

There are three areas to check out when looking into a someone to prepare your taxes.   They include how long the preparer has been doing taxes, how much experience they have, and how they are making their money by doing your return.

In addition to the above alleged tactic used by Go Navy Tax Service, other red flags include a return with creative deductions, or any fabricated information in order to increase the size of your refund, or a “cash only” payment policy. Be wary of anyone promising large refunds.

Do not under any circumstances sign a blank return or allow your refund to be deposited into any bank account other than your own. Always double-check the tax forms before signing them and mailing or e-filing them. You’re the one who has to answer if you are audited by the IRS, and you could be in serious trouble for providing fraudulent information. Double check both the routing number and the account number to make sure they are yours and the refund is not going to anyone else.

Of course everyone wants to receive the largest refund possible, but don’t let the promise of a big payoff keep you from doing a thorough check on your tax preparer.

Many military installations and numerous community locations offer free tax preparation assistance through the IRS’ Volunteer Income Tax Assistance (VITA) programs.

For more military-specific resources, visit the IRS military page at https://www.irs.gov/individuals/military

Veteran and Military Business Owners Association, VAMBOA,