Where do I enter an amount on DFAS Form 705 in excess of $3,000?
I have a client that received a DFAS Form 705 for $6,398.84 that represents an overpayment they received from the Dept. of Defense during the 2014 calendar year. According to IRC1341 it can be a credit against tax, a 2% Misc. Deduction, or a Misc. Deduction not subject to 2%. I don't understand which to use or when. I do know there is a $3,000 cut off point on the overpayment, which I believe is a 2% Misc. Deduction.