Tax law basics Published Feb. 24, 2016 By Malmstrom Legal Office MALMSTROM AIR FORCE BASE, Mont. -- Taxes can intimidate many people. Most people, however, don't realize how simple it can be. This article will cover the some of the basics of tax law, such as the Affordable Care Act, as well as income, deductions and exemptions. First, the Affordable Care Act requires individuals to pay a tax if they do not have qualifying health care. In this regard, the ACA requires that individuals have minimum essential coverage or qualify for an exemption. If an individual does not meet one of these requirements, then they must pay a shared responsibility payment on their federal tax return. Fortunately for military members, Tricare qualifies as minimum essential coverage. Next, there is income. An individual's gross income includes money, goods, property and even services received. Income comes from a variety of places. The most obvious form of income is money in the form of wages. This is reported on W-2 forms. Employers are required to make W-2 forms available to employees by Jan. 31. While the federal government taxes military base pay, certain states may not. In addition, tip income must also be reported. Individuals making more than $20 a month in tips at one job and that have been reported to an employer, will be reported on the W-2. Some employers use tip allocation to ensure that all employees report their fair share of tip income. In order to show that the allocated tip amount is inaccurate (the allocated tip amount is greater than the amount of tips actually received), tax payers must keep a written, reliable record of tips. Tax payers are also required to report any dividends or interest received throughout the year. These sources of income will be reported on a Form 1099. Military members who perform a personally procured move throughout the year must also report any net financial gains received as a result of the move. These gains should be reported on a separate W-2. An individual's gross income, however, will be reduced through deductions. Deductions are essentially subtractions from a person's income. The individual may either take the standard deduction or itemized deductions, but they should take the deduction that results in the lowest tax. Most people take the standard deduction. For a single individual, this deduction will most likely be $6,300. For a married couple filing joint, this deduction will most like be $12,600. Individuals with a standard deduction of zero should itemize their deductions. People who have a standard deduction of zero include those people married, filing separately, when their spouse itemizes, those filing a return for a short tax year and nonresident aliens/dual status aliens. In addition to being entitled to either the standard deduction or itemized deductions, individuals may also be able to claim a personal exemption for both them and their spouse (if married filing joint) and a dependency exemption for any qualifying dependents. In order to claim a personal exemption, nobody else must be able to claim them (or their spouse) as a dependent on their tax return. In order to claim a dependency exemption, either a qualifying child or qualifying relative must be a dependent. Qualifying children include natural, step, foster or adopted children. Such a child must be 19 years old or younger at the end of the tax year, a full-time student 24 years old or younger, or totally and permanently disabled. Lastly, to be a qualifying child, the child must have lived with the individual for more than half the year. In conclusion, military members have minimum essential coverage under the ACA through Tricare. Gross income includes all of the money, goods, property and services a person receives throughout the year. An individual's income will be reduced through either the standard deduction or itemized deductions. Lastly, in addition to any deductions a person may claim, they may be entitled to an exemption for themselves, their spouse and any dependents.