Americans who serve in the military have specific and unique job expenses and changes. There are tax benefits that could apply when a member of the service moves from one base to another, when they are sent to a new duty station, or when they return from active duty. Here are some tax tips for military personnel.
- Moving Expenses: As a member of the military on active duty, you are allowed to deduct any un-reimbursed moving expenses for your household and yourself.
- Combat Pay: If you are serving in combat as an enlisted soldier or warrant officer for any amount of time during a month, the pay you get for your service you get for that month is not subject to taxes. If you are an officer, the exclusion is capped at the highest enlisted pay and any “hostile fire” or “imminent danger” pay.
- Extension of Deadlines: Any time for dealing with special tax matters are postponed. The deadline is extended to file returns, pay your taxes, file claims for refunds, and any other matters with the IRS if you are a qualifying member of the military.
- Uniform Cost and Upkeep: If you are prohibited from wearing certain uniforms when you are off-duty, your costs for those uniforms can be deducted, however, you have to lower your expenses by any reimbursement you get.
- Joint Returns: Joint returns must be signed by both spouses with typical tax returns, but if you are in the military, you may not be able to sign due to active duty. In this case, you may have a power of attorney sign for you.
- Travel to Reserve Duty: If you are in the reserves, you can deduct any un-reimbursed travel expenses if your duty is more than 100 miles from home.
- ROTC Students: ROTC students who are in advanced training are not taxed for subsistence allowances. Active duty pay, like pay from summer advanced camp, are taxed.
- Transitioning Back to Civilian Life: It is possible that you will be able to deduct the cost of looking for a new job. These expenses could be for travel, resume preparation, and employment agency fees. You may also be able to deduct moving expenses if moving is related to your new employment and you meet the requirements.
- Tax Help: Many military bases provide tax filing assistance at no cost during tax season.
For more IRS tax information, look for Publication 3, Armed Forces’ Tax Guide. It will help you with military-related information. You can download the publication at www.irs.gov or you can order a copy by calling 800-829-3676.
For questions about any of these tips, contact a qualified tax professional.