The Foreign Service Journal, February 2013

THE FOREIGN SERVICE JOURNAL | FEBRUARY 2013 37 AFSA NEWS WOMEN IN SECURITY AND DEVELOPMENT FOCUS AFSA NEWS CALENDAR 2/6/2013 12:00 - 2:00 PM AFSA Governing Board Meeting 2/6/2013 Deadline for Art and Academic Merit Awards Applications 2/10 - 2/13/2013 AFSA Road Scholar Program 2/11/2013 2:00 - 3:30 PM Seminar: Getting the Most Out of Your TSP 2/11 - 2/13/2013 8th Annual Conflict Prevention, Peacekeeping & Stability Conference 2/18/2013 Presidents Day: AFSA Offices Closed 2/20/2013 12:00PM - 1:00PM Luncheon: 170th A-100 Class 2/28/2013 Deadline for AFSA Dissent and Performance Award Nominations 3/6/2013 12:00 - 2:00 PM AFSA Governing Board Meeting 3/6/2013 Deadline for AFSA Financial Aid Applications 3/10 - 3/14/2013 AFSA Road Scholar Program 3/17 - 3/20/2013 AFSA Road Scholar Program THE OFFICIAL R CORD OF THE AMERICAN FOREIGN SERVICE ASSOCIATION Federal and State Tax Provisions for the Foreign Service the area on qualified official extended duty as a member of the uniformed services, the Foreign Service or the intelligence community. The five-year period cannot be extended by more than 10 years. In other words, Foreign Service employees who are overseas on assignment can extend the five-year period up to 15 years, depending on the number of years they are posted away from their home.. For 2012, the six tax rates for individuals remain at 10, 15, 25, 28, 33 and 35 percent. The 10-percent rate is for tax- able income up to $17,401 for married couples, $8,701 for singles. The 15-percent rate is for income up to $70.701 Continued on page 41 AFSA’s annual Tax Guide is designed as an informational and reference tool. Although we try to be accurate, many of the new provisions of the tax code and the implications of Internal Revenue Service regulations have not been fully tested. Therefore, use caution and consult with a tax adviser as soon as possible if you have specific questions or an unusual or complex situation. Foreign Service employ- ees most frequently ask AFSA about home ownership, tax liability upon sale of a residence and state of domi- cile. We have devoted special sections to these issues. James Yorke (YorkeJ@state. gov), who compiles the tax guide, would like to thank M. Bruce Hirshorn, Foreign Service tax counsel, for his help in its preparation. Federal Tax Provisions The Military Families Tax Relief Act of 2003 contin- ues to provide a significant benefit for Foreign Service families who sell their homes at a profit, but would have been unable to avail them- selves of the capital gains exclusion (up to $250,000 for an individual/$500,000 for a couple) from the sale of a principal residence because they did not meet the Inter- nal Revenue Service’s “two- year occupancy within the five years preceding the date of sale” requirement due to postings outside the U.S. In relation to the sale of a prin- cipal residence after May 6, 1997, the 2003 law provides that the calculation of the five-year period for measur- ing ownership is suspended during any period that the eli- gible individual or his or her spouse is serving away from PLEASE NOTE This guidance applies to the 2012 tax year, for returns due on April 15, 2013. We expect there will be a variety of changes to the tax code for the 2013 tax year, but at present we are not aware of any possible changes that are likely to apply to 2012.