TRICARE Help ► Q&A 151130
Have a question on how TRICARE applies to your personal situation? Write to Tricare Help, Times News Service, 6883 Commercial Drive, Springfield, VA 22159; or firstname.lastname@example.org. In e-mail, include the word “Tricare” in the subject line and do not attach files. Information on all Tricare options, to include links to Handbooks for the various options, can be found on the official Tricare website, at this web address: http://www.tricare.mil/Plans/HealthPlans.aspx or you can your regional contractor. Following are some of the issues addressed in recent weeks by these sources:
(Q) Why is the Tricare Reserve Select monthly premium for my spouse so much higher compared to if only I was enrolled?
A. To be precise, the TRS monthly premium is $50.75 for sponsor only, $205.62 for sponsor and family. And the gap will widen further as of Jan. 1, when sponsor only coverage drops to $47.90 while family coverage creeps up to $210.83. It’s simply the model for most employer- provided health care, including Tricare: Costs for the employee himself/herself — the primary beneficiary — are relatively modest compared to when family members enter the picture.
(Q) I’m a 31-year-old disabled retiree who has been using Tricare Prime. I recently received information about enrolling in Medicare. I opted for Part A inpatient coverage but passed up Part B outpatient coverage since I wanted to keep Prime, which is simple and affordable. Now I’m told I’m no longer eligible for Prime, but must use Tricare for Life.
A. That’s right, precisely because you’re now eligible for Medicare. For most, this transition comes at age 65, but it arrives sooner for those who become Medicare-eligible earlier than 65 due to disability. Under Tricare for Life, Medicare is first payer and Tricare Standard is second payer. Enrollment in Part B and payment of its monthly premium (now $104.90 for most people) is a requirement for you to use the Tricare portion of your TFL benefit. That premium should be your only recurring cost. The combination of Medicare and Tricare Standard will cover 100 percent of your costs on the vast majority of your health care claims. Contact your local Social Security office about enrolling in Part B. Then contact the Defense Enrollment Eligibility Reporting System to ensure your current status as a TFL beneficiary is reflected in the DEERS database. Visit the ID Card/DEERS office on any installation or call the main DEERS support office at 800-538-9552.
Correction: The Nov. 9 Tricare Help column incorrectly cited Tricare age limits for child dependent beneficiaries. “Normal” Tricare eligibility ends when a child dependent turns 21, but may extend to the 23rd birthday if the child remains enrolled as a fulltime college student. After reaching either of those limits, children may use Tricare Young Adult, which requires enrollment and payment of monthly premiums, until they reach age 26.
(Q) I was recently prescribed Lunesta for my sleep problems. It does help me sleep better, but I wake up with a funny taste in my mouth. I’ve never heard of a medication causing something like this.
A. Waking in the morning with a strange taste in your mouth is a relatively common side effect of this medication. The taste is generally described as metallic or bitter. It’s assumed that an ingredient in the pill is the culprit. Most people learn to deal with the unpleasant aftertaste, but for some the taste is so annoying the only option is to switch to another medication. Lunesta has other side effects that may be a greater cause for concern. Memory loss is one; some patients report amnesia for events like eating during the night or walking outside. Others experience falls related to being overly sedated and dizzy. And feeling groggy the next morning is common. Weighing the benefits and risks of any medication is always important.
(Q) I take Zoloft for depression and anxiety. I’m having some problems in the bedroom. I have a tough time getting in the mood, and when I do, I can’t seem to “seal the deal.”
A. Sexual problems are some of the most commonly reported side effects of antidepressant and antianxiety medications like Zoloft. The complaints range from loss of interest in sex to the inability to experience an orgasm. It’s estimated that over half the people who take these medications experience some degree of low sex drive, impotence and problems with achieving an orgasm. Many people stop the medication because of these side effects. This is unfortunate because depression and anxiety will then go untreated. Some things can help counter these ill effects. A reduction in dosage may be a first step; these kinds of effects tend to worsen at higher dosages. Another approach is to switch to a medication known to have fewer sexual side effects. For example, Wellbutrin is effective for depression and is associated with fewer sexual problems. In case of difficulty achieving or maintaining an erection, Viagra may be the solution. As with all concerns about the effects of any medication you take, it’s important to promptly and frankly talk with your health care provider.
[Source: MilitaryTimes | 15 thru 30 Nov, 2015 ++]
* Finances *
Road Usage Tax ► Possible Traditional Gas Tax Replacement
The traditional gas tax isn’t generating enough money for roads and bridges. Could a “road usage tax” replace it? As revenue from the standard per gallon gas tax diminishes, states are looking for other ways to pay for the construction and maintenance of roads and bridges. California recently authorized its own mileage tax pilot project. Between 2008 and 2014, at least 19 states considered 55 measures related to mileage-based fees, according to the National Conference of State Legislatures. Vermont and Washington enacted bills to study per-mile fees in 2012.
Oregon is leading the way. Its experiment, OreGO, is the first that involves ordinary citizens. Other states have been watching closely since the program began 1 JUL. Evan Burroughs plopped into his 1996 Subaru Outback and pointed to a green plastic box tucked below the steering column. It blinked once. As Burroughs eased the car out of the parking lot and drove toward the highway, the box kept track of his speed and braking, but most importantly, of how many miles he drove. The green box, part of a pilot program, sends the data to a private contractor like a GPS device manufacturer, which reports the miles to Oregon, which calculates Burroughs’ tax bill—1.5 cents per mile. “It’s kind of like playing a computer game, but with real stuff,” said Burroughs, 56, who obviously gets a kick out of seeing data detailing his driving habits. Matthew Garrett, Oregon’s transportation director, noted that Oregon enacted the nation’s first gas tax in 1919 so it could pay for roads to get vehicles out of the mud. “We’ve always been pioneers, and after 90 years, it’s time to innovate again,” he said.
New, more fuel efficient cars have eaten into gas tax revenue. Furthermore, many gas tax rates—including Oregon’s 30-cent levy—have not kept up with inflation. In Oregon the effective tax rate will fall to less than 24 cents per gallon in inflation-adjusted terms within 10 years, according to the Institute on Taxation and Economic Policy, a nonpartisan think tank. That decline would basically undo the state’s 6-cent increase in 2009, ITEP noted. A mileage, or road usage, tax also erodes with inflation, but is immune from improvements in fuel efficiency. “If you don’t have the revenue source you can’t maintain the infrastructure,” Garrett said. “Traditional methods of funding transportation—the gas tax—were constructed for the longest time. But the world has changed.”
For purposes of the experiment, which isn’t designed to put more money in the state’s coffers, Oregon charges 1.5 cents for every mile driven. Every driver who participates in the program, whether he or she drives a little fuel-efficient car or a big pickup truck, pays the same rate for driving on Oregon roads (the program doesn’t count driving in other states or on private roads). The state reimburses drivers who paid more in traditional gas tax than they would be assessed using the mileage calculation. To illustrate how the program works, the Oregon Department of Transportation compared a 2014 Toyota Prius and a 2014 Ford F-150 (the two most popular vehicles enrolled in the program). The Prius averages 50 mpg and the F-150 gets 18 mpg. The average Oregonian drives 12,962 miles a year. Given those numbers, the Prius owner would use 259 gallons in a year and pay $77.77 in gas taxes, while the F-150 owner would use 720 gallons and pay $216 in gas taxes. The annual road usage tax due for both drivers would be $194.43. The average Prius owner would pay the state $116.66 (the difference between the $194.43 in road usage taxes and the $77.70 in gas taxes), while the average F-150 owner would get a $21.60 rebate (the difference between the $216.03 in gas taxes and the $194.43 in road usage taxes).
Garrett said the goal isn’t to discourage the use of fuel-efficient cars, but rather to ensure that those drivers are paying their fair share to maintain roads and bridges, which they rely on just as much as drivers of less fuel-efficient cars. “On a fundamental level, having people pay for the roads by how much they use them is fair,” said Jessica Moskovitz, of the Oregon Environmental Council. But she urged the Legislature, when it evaluates the program, to think twice about “incentivizing cars that are good for our planet or incentivizing gas guzzlers.” Nel Osborn, 64, a Salem retiree who drives a Prius with a “53 MPG” license plate, volunteered for the experiment. She pays an additional $1 to $1.50 to the state per month under the road usage tax system. “It does seem weird that people who have Hummers benefit and people that drive Priuses do not,” she said. But Osborn said she is willing to pay a little more to help maintain Oregon’s roads and bridges. The extra money she owes is deducted automatically from her account, and she said the additional information had changed her driving habits: “I’ve been braking a little less.”
The trial program is also designed to gauge what people think about the new system, and both Osborn and Burroughs complained about one feature: When they drive less than a mile, the device notifies them that they could have walked. Osborn said that’s not practical when she comes home alone from the library at night. Burroughs, who has used a wheelchair since a 1991 accident, just chuckles. “I use drive-ups a lot,” he said. When the pilot was first conceived last year, it drew skepticism from privacy advocates, who worried about the state tracking people’s whereabouts. But because the program is currently voluntary, and no information about driving habits is sent to the state or law enforcement without a warrant, that criticism has been muted. During debate on the program, the American Civil Liberties Union was assured that if it ever becomes mandatory, taxpayers could opt for an alternative to the GPS-based device. “We were able to get to a place where the ACLU did feel good about the program,” Becky Straus, legislative director for the ACLU of Oregon, said at the time.
The Oregon program was authorized for up to 5,000 participants, but since the July 1 start date, only 940 people have signed up. Some are concerned about privacy; others are reluctant because they simply do not want to get involved. Oregon is trying to get more people comfortable with the idea, in part through advertising. In 2014, the California Legislature directed state transportation officials to study the feasibility of replacing the state’s 42.4-cent gas tax with a road usage tax. The bill noted that if there is no change in the existing state gas tax, by 2030 as much as half of the gas tax revenue that could have been collected would be lost to fuel efficiency.
In California the study is underway and by the end of this year, signups will begin for an experimental program much like Oregon’s that is to start at the beginning of 2017. A report on the effort is due to the Legislature by the end of June 2018. U.S. Rep. Mark DeSaulnier, a Democrat who was in the California Assembly when the bill passed, is the author of the legislation. He said he wrote it because of “a dire shortfall when it comes to investment in infrastructure.” He said he had to overcome privacy concerns and “anti-tax people.” Supporters tried to address the privacy concerns by including an option allowing drivers to simply have their odometers read once a year and the mileage noted. But that would not differentiate out-of-state driving, as the GPS systems could. DeSaulnier said the federal government could learn from Oregon and California.
Congress has not addressed the federal gas tax of 18.4 cents a gallon, which has not been lifted in two decades and now generates 31 percent less than in 1998, according to ITEP. Without federal help, states have been forced to act. Since 2013, 17 states have either increased old-fashioned gas taxes or set up some link to inflation. Georgia has done the most; it increased its gas tax by 6.7 cents this year and will raise it each July through 2018, based on growth in both fuel efficiency and inflation. After 2018, the increase will be based on fuel efficiency alone. “I think the biggest problem here [in Washington, D.C.] is the majority party thinks they can invest in infrastructure without paying for it,” DeSaulnier said. “At some point the federal government has to do what the states are doing—find out how to fix the gas tax.” [Source: The Pew Charitable Trusts | Elaine S. Povich | November 05, 2015 ++]
IRS Audit Update 05 ► Now Less Than 1% Chance
The Internal Revenue Service, with 22 percent fewer agents than it had five years ago, on 3 NOV reported its lowest percentage of tax returns audited in 11 years. Commissioner John Koskinen told a gathering of the American Institute of Certified Public Accountants that his agency is “especially concerned about the effect that the reduction in our workforce has had on audits. The IRS completed about 1.2 million individual audits in fiscal 2015. That’s 13,700 fewer than the previous year. Even more disturbing, the decline in audits in 2015 was not a one-year aberration. The number for 2015 was 350,000 below five years ago. That’s a drop of 22 percent, and corresponds exactly to the number of revenue agents, which is also down 22 percent since 2010.”
The staff cuts of some 15,000, he continued, came as the number of income tax returns filed by individuals topped 146 million, an increase of almost 3 percent from 2010. “Not surprisingly, we’re seeing clear evidence of a longstanding decline in revenue coming from audits,” Koskinen said in his speech. “Between 2005 and 2010, the revenue generated from audits averaged $14.7 billion annually. But since 2010, it has averaged only $10.5 billion a year, which is a drop of nearly 30 percent, and translates to more than $20 billion in uncollected revenue over the past five years.” The percentage of individual tax returns audited to detect errors or fraud has declined steadily. “For many years, the likelihood that an individual’s return would be audited was about 1 percent,” the commissioner said, “but in 2013 it fell below 1 percent and for fiscal 2015 it fell to 0.84 percent, the lowest level since fiscal 2004.
Koskinen called the budget cuts his agency’s No. 1 problem, repeating past comments addressed to Congress about poor phone service to taxpayers and practitioners, aging computer systems and added responsibilities imposed by new laws. “There is a limit to how much we can do to find efficiencies,” he said. “In 2015, we reached the point of having to make very critical performance tradeoffs. There was simply no way around the severity of these budget cuts without taking difficult steps, which have had negative impacts on service, enforcement and information technology.” Rep. Jim Jordan, R-Ohio, a frequent critic of the IRS who serves on the House Oversight and Government Reform Committee, on 4 NOV was asked about the budget strains and said, “Maybe if the IRS had spent less time and money targeting the First Amendment rights of conservative groups around the country, then staff might have been able to better focus on doing the jobs that taxpayers actually pay them to perform.” In an email to Government Executive, Jordan added that, “The IRS complains about having spent $14 million on the investigation into its targeting of conservatives. But this money was not used to preserve documents or clean up the department’s act. It seems to me like it was only used on efforts to obstruct our attempts to get to the truth.” Here's a look at the IRS' recent auditing numbers:
[Source: GovExec.com | Charles S. Clark | November 4, 2015 ++]
Pet Owner Tax Deductions ► Six Allowable Write-offs
Almost every pet owner will tell you that their animal is a member of the family. The IRS disagrees. That's why the taxman won't let you claim your dog, cat, guinea pig or whatever critter brightens up your life as a dependent. That means you get no tax exemption for all the love and care you provide your pet. And that care can be expensive. Market research by the American Pet Products Association found that U.S. pet owners spent more than $58 billion on their animals in 2014. The group estimates that amount will grow to more than $60 billion in 2015. Many of those dollars go each year to veterinarians. But again, the IRS says "no" at tax time. You can't count those bills as itemized medical deductions. However, the Internal Revenue Code does allow a few instances where you can write off some pet costs. Take a closer look at these 6 pet-related tax write-offs:
Medical Deduction - Medical expenses have gotten harder to claim. If you're younger than 65, you now must have enough health care costs to exceed 10% of your adjusted gross income. It sure would be nice if you could add in your furry child's veterinary charges. Sorry, that's not going to happen. But the IRS does say in Publication 502 that if you need a guide dog, either to compensate for your reduced vision or hearing, you can include the costs of buying, training and maintaining that animal in medical expenses. In general, this includes such things as food, grooming and veterinary care that is necessary to make sure the animal is healthy enough to perform its assistance duties. If you've been diagnosed with a physical or mental condition that benefits from the attention of a trained therapy animal, those costs also count as a medical expense. Note, however, this doesn't cover your loving cat that comforts you when he curls up in your lap. The animal must be trained or certified as treatment for a diagnosed illness or condition for the IRS to approve the deduction.
Business animals - That "Beware of dog" sign in your business's window is no idle threat. Break-ins have stopped since you set up a place for your Rottweiler to stay overnight. In this case, the IRS would likely be amenable to business deduction claims of the animal's work-related expenses. Standard business deduction rules still apply, notably that the cost of keeping an animal on work premises is ordinary and necessary in your line of business. Once you show that, the dollars spent each year keeping your pooch in good guard condition -- food, vet bills and training -- would be deductible as a business expense. As with all deductions, be prepared to provide full and accurate records of your animal's hours on the job. You'll also find your tax claim more acceptable when you demonstrate how the animal protects your livelihood's inventory. In addition, as is often the case with business property, the dog must be depreciated, a way of allocating its cost over its useful life for IRS purposes. Keep in mind, too, that your claims carry more weight when your pet is a breed that's typically used for such jobs. So even though your Chihuahua has a loud bark, your tax claim is more credible if your guard dog is a German shepherd, Doberman pinscher or a similar imposing breed.
Moving Costs - Moving can be tough on humans and pets alike. If you are not equipped to cart your cat or dog cross-country, consider sending the pet to your new home via special transportation. You can even deduct the costs.
That's right, the IRS says in Publication 521 that you can deduct the cost of shipping your household pets to your new home. Even better, you don't have to itemize deductions to claim moving costs, including those spent on getting Fido or Felix to your new place. The write-off for moving costs is an above-the-line deduction. You'll need to fill out a work sheet and file the long Form 1040 and Form 3903 to claim it. But the work is generally worth it. The deduction could help pay for your pet's relocation costs.
Hobby Expenses - Your mutt is the best dog in the world, but you know there's no way he would win at the Westminster Kennel Club show. Still, you and Fido enjoy participating in your local pet expos. And occasionally, your pooch takes home a trophy and a cash prize. Or perhaps, like former President George W. Bush, you relax by painting portraits of your pet. A few of your canvases even netted you some extra cash at the local sidewalk art show. Technically, those hobby-related earnings are taxable income. You can, however, use your hobby's expenses to offset your hobby earnings. But there is a catch. Your hobby expenses are itemized with other miscellaneous deductions on Schedule A, and that total must exceed 2% of your adjusted gross income before it's deductible. Still, it might be worth hanging on to the receipts, just in case. And if your pet-related hobby starts raking in big bucks on a regular basis, you might want to consider turning it into a business, where you can write off even more expenses.
Charitable Deductions - You got your cat from a shelter, where she was dropped off by a previous owner who couldn't care for her any longer. If no one had adopted her, she might have faced euthanasia. Such rescue animals hold a special place in your heart. And besides donating to these animal-shelter nonprofits, you also volunteer your time. Be sure to keep track of your pet protection expenses. They could count as a charitable donation. Unreimbursed expenses for fostering a pet for an IRS qualified 501(c)(3) adoption organization can be deducted. This includes the usual costs for pet food, supplies and veterinary bills. You can also deduct 14 cents per mile for trips made to further the shelter's work. Add up the costs, along with direct donations to a rescue group, and itemize them under the charity section of Schedule A. Make sure, though, that you keep good records. In 2011, an Oakland, California, woman won a tax court judgment that allowed her to claim many cat rescue expenses on her 2004 tax return, including the usual care costs, a portion of her utility bills and even such things as paper towels and garbage bags. But her $12,068 deduction was reduced because she didn't have all the related receipts, especially for items costing $250 or more. She also lacked a valid letter from the feline charity acknowledging her volunteer work.