The IRS has special tax benefits for service personnel on active duty. The following rules may apply to you:
- Deadline Extensions. Qualifying military members, including those who serve in a combat zone, can postpone some tax deadlines. This includes automatic extensions of time to file tax returns and pay taxes.
- Combat Pay Exclusion. If you serve in a combat zone, you can exclude certain combat pay from your income.
- Earned Income Tax Credit – This is a refundable federal income tax credit for low to moderate income working individuals and families.
- Moving Expense Deduction. If you move due to a permanent change of station, you may be able to deduct some of your unreimbursed moving costs.
- Uniform Deduction. You can deduct the costs and upkeep of certain uniforms that regulations prohibit you from wearing while off duty.
- Signing Joint Returns. Both spouses normally must sign joint income tax returns. However, when one spouse is unavailable due to certain military duty or conditions, the other may, in some cases sign for both spouses.
- Reservists’ Travel Deduction. If you’re a member of the U.S. Armed Forces Reserves, you may deduct certain travel expenses on your tax return. You can deduct unreimbursed expenses for traveling more than 100 miles away from home to perform your reserve duties.
- Nontaxable ROTC Allowances. Educational and subsistence allowances paid to ROTC students participating in advanced training are not taxable.
- Civilian Life. After leaving the military, you may be able to deduct certain job hunting expenses. Expenses may include travel, resume preparation fees and job placement agency fees. Moving expenses may also be deductible.
- Tax Help. Most military bases offer free tax preparation and filing assistance during the tax filing season.
You can learn more about these tax benefits in Publication 3, Armed Forces’ Tax Guide. The booklet is available on IRS.gov website. Of course you should talk to your CPA about these deductions to make sure you qualify. Need a referral to a tax preparer? Call us at 310-534-5577 or e-mail us at [email protected].
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