When it comes to our nation’s armed forces if you or your spouse has served in the military, your sacrifice deserves acknowledgment – one of the ways the IRS says “thank you” is several notable tax breaks for members of the military.
Have you served or currently are serving in the armed forces? If so, these tax benefits and worthy extensions could apply to you.
Combat Pay Exclusion
For anyone serving in what’s considered a “combat zone”, any income received by military personnel is tax-free. This tax exclusion also applies to any personnel working in departments that lie outside a combat zone, but directly aid any combat zone efforts as marked by the Department of Defense. However, commissioned officers may not qualify.
Earned Income Tax Credit
Anyone who does receive tax-free income within combat zones, they are not required to file this tax-free pay along with their regular, taxable income (whether earned outside a combat zone, or by a spouse). For many, this can often help to give a higher earned income tax credit – meaning less taxes owed, or even more coming back on their returns.
Filing Extensions
If any active duty military member is overseas, they can apply for a filing extension to postpone any tax due dates. For some, even automatic tax extensions can be received year after year which applies for both tax filing and payments.
Joint Return Signatures
Whenever a married couple decides to file their taxes jointly, both spouses must sign the return. However, if one spouse is out on active duty or overseas, the remaining spouse or a power of attorney may be able to sign for both in their absence.
Travel for the Reserve and National Guard
For members of the National Guard or a reserve component where typically a lot of travel is involved from drills and deployments, unreimbursed travel expenses may be deducted on tax returns, provided their duties took them over 100 miles away.
ROTC
If you’re an ROTC student in advance training, sometimes allowances are given for education supplies and living expenses – the IRS counts these as tax-free. However, for active duty ROTC, all pay received is taxable, including that for advanced summer camp.
Military Volunteer Income Tax Assistance
Have more questions on the tax specifics of military personnel? Military Volunteer Income Tax Assistance (VITA) centers are standing by at locations across the globe, filled with knowledgeable staff trained by the Armed Forces Tax Council – making them more than equipped to answer any questions you may have.
