Tax Tips for Members of the Military
Special tax benefits apply to members of the U.S. armed forces. For example, some types of pay are not taxable, and special rules may apply to some tax deductions, credits, and deadlines. Here are ten of those benefits:
- Deadline Extensions.Some members of the military, such as those who serve in a combat zone, can postpone some tax deadlines. If this applies to you, you can get automatic extensions of time to file your tax return and to pay your taxes. For example, service members stationed abroad have extra time (until June 15) to file a federal income tax return. Those serving in a combat zone have even longer, typically until 180 days after they leave the combat zone. They may also qualify to delay payment of income tax due before or during their period of service. Please call our office for details, including how to request relief.
- Combat Pay Exclusion.If you serve in a combat zone, certain combat pay you receive is not taxable. You won’t need to show the pay on your tax return, because combat pay isn’t included in the wages reported on your Form W-2, Wage and Tax Statement. Service in support of a combat zone may qualify for this exclusion.
- Earned Income Tax Credit (EITC).If you get nontaxable combat pay, you may choose to include it to figure your EITC. You would make this choice if it increases your credit. Even if you do, the combat pay stays nontaxable.
- Moving Expense Deduction.You may be able to deduct some of your unreimbursed moving costs. This applies if the move is due to a permanent change of station. Use Form 3903, Moving Expenses
- Uniform Deduction.You can deduct the costs of certain uniforms that regulations prohibit you from wearing while off duty. This includes the costs of purchase and upkeep. You must reduce your deduction by any allowance you get for these costs.
- Signing Joint Returns.Both spouses normally must sign a joint income tax return. If your spouse is absent due to certain military duty or conditions, you may be able to sign for your spouse. In other cases, when your spouse is absent, you may need a power of attorney to file a joint return.
- Reservists’ Travel Deduction.If you’re a reservist in any branch of the U.S. armed forces, you may deduct certain costs of travel on your tax return, even if you don’t itemized your deductions. This applies to the unreimbursed costs of travel to perform your reserve duties that are more than 100 miles away from home.
- Nontaxable ROTC Allowances.Active duty ROTC pay, such as pay for summer advanced camp, is taxable. But some amounts paid to ROTC students in advanced training are not taxable. This applies to educational and subsistence allowances.
- Civilian Life.If you leave the military and look for work, you may be able to deduct some job hunting expenses. You may be able to include the costs of travel, preparing a resume and job placement agency fees. Moving expenses may also qualify for a tax deduction.
- Retirement Savings.Low-and moderate-income service members who contribute to an IRA or 401(k)-type retirement plan, such as the federal government’s Thrift Savings Plan, can often claim the saver’s credit, also known as the retirement savings contributions credit, on Form 8880, Credit for Qualified Retirement Savings Contributions.
Getting Tax Help
Although most military bases offer free tax preparation and filing assistance during the tax filing season, you may need to contact a tax professional during other times of the year. Don’t hesitate to contact our office with any questions you have about your taxes–no matter what time of the year it is.