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.
- Combat Pay Exclusion. If you serve in a combat zone, certain combat pay you get 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; however, even if you do include it to calculate EITC, the combat pay stays nontaxable.
- Moving Expense Deduction. You may be able to deduct some of your unreimbursed moving costs if the move is due to a permanent change of station.
- Uniform Deduction. You can deduct the costs of certain uniforms that regulations prohibit you from wearing while off duty, including not only the costs of purchase but also the upkeep, net of 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 member of the U.S. Armed Forces Reserves, you may deduct certain costs of travel on your tax return. 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.
- Tax Help. Most military bases offer free tax preparation and filing assistance during the tax filing season [until April 15], and some have free tax assistance available even thereafter.
Additional IRS Resources:
- Publication 3, Armed Forces’ Tax Guide
- Questions & Answers on Combat Zone Tax Provisions
- Publication 521, Moving Expenses
- Publication 529, Miscellaneous Deductions
DISCLAIMER: This information is extracted with permission from IRS releases. We are not responsible for the application of this general information to the specific circumstances of a reader unless we have been engaged as the reader’s tax preparer.
ASSISTANCE: If you need help in preparing your income tax returns, Roy & Associates, PC may be able to be of assistance. Our firm and its predecessor firms have been providing tax services to individuals, small businesses and nonprofit organizations in southwestern Pennsylvania since 1942. You may make an appointment with one of our Directors of Audit and Tax Services, all of whom are well-versed in personal income taxation. See the CONTACTS page above. Standard rates and terms for service will apply.
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