Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.
Q: My son, who is in the military, is a resident of Maryland, but he's been overseas for a while and is now stationed in North Carolina. Is he still required to file state taxes in Maryland?
A: Basically, if your son is a permanent resident of Maryland, he is required to file a Maryland return even if he's stationed in another state. A special provision may allow him to subtract up to $15,000 of his military pay from his income if the pay was attributable to service "outside the boundaries" of the United States. He can calculate the allowable deduction using the work sheet on Page 6 of Maryland Form 502 instructions. If he is taxed by North Carolina he can fill out Form 502CR to get a credit on his Maryland return for taxes paid to North Carolina.
Q: Last year I had to pay the State of Maryland $700 because I didn't withhold enough. Is that $700 deductible on my 1994 Maryland or federal tax return?
A: The state income taxes you paid last year are considered an itemized deduction on your federal return but not on the Maryland return. Before you decide to itemize your deductions on Schedule A of your federal Form 1040, be sure that your total itemized deductions exceed the standard deduction for your filing status.
The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.
A joint service from The Baltimore Sun and the Maryland Association of Certified Public Accountants can help you with your tax queries. Association members, all CPAs, will answer questions from readers until April 15 and also offer a Tax Tip of the Week.
To submit a tax question, call Sundial, The Sun's telephone information service, at (410) 783-1800. In Anne Arundel County call 268-7736, in Harford County 836-5028, and in Carroll 848-0338. Using a touch-tone phone, enter 6225 after the greeting. Push 1 to submit a tax question; state the question in full. Push 2 to hear the tax tip. Selected questions will be answered in the Business section. No questions will be answered by phone.