8 Tax Tips for the Military

Living in the Washington D.C. area means that a lot of my friends and neighbors are active or retired military. Oftentimes, their children also join the military in some capacity and I’m always thankful for their service. My neighbor’s son recently joined the Marine Corps and completed basic training down at Parris Island.

So it’s no mystery to me that members of the military sacrifice a great deal to defend us at home and abroad. Unfortunately, tax time may offer specific challenges to military personnel. As you get ready for tax season, here are a few tips to help make it as painless as possible:

1. Stay Organized Throughout the Year

One of the best things you can do is to stay organized throughout the year. If you will be away, coordinate with your partner to keep things organized for your taxes so that you are less stressed when it is time to file – and so that your partner can file if you are away.

2. Use Power of Attorney So Your Spouse Can File

One of the best things you can do is make sure your spouse has the proper power of attorney to ensure that your joint tax return can be filed. In most circumstances, both spouses have to sign a joint tax return. Power of attorney allows your spouse to sign on your behalf. If you will be unreachable during tax time, knowing that your spouse can take care of it provides peace of mind.

3. Extend Your Deadline

For certain qualifying members of the military, it is possible to extend deadlines related to filing tax returns and paying taxes for the period of service in a combat zone, plus 180 days after your last day in the combat zone. In addition to 180 days, extension periods may include additional days left before April tax filing deadlines when combat zones are entered.  For instance, if you entered a combat zone 46 days before the April tax filing deadline, you would receive a total 226-day extension.  No penalties or interest would be assessed during this time.  A little extra time might be all you need.

4. Moving and Travel Expenses

If you aren’t reimbursed for certain moving expenses related to a change of station, you might be able to deduct some expenses for yourself and your family members. You do need to be on Active Duty, though. For those on Reserve Duty, you can receive a deduction for your travel expenses if you have to go more than 100 miles to fulfill your duties.

5. Uniform Costs

Uniforms can be costly to buy and keep up. You want them to be in best condition. If your uniform can’t be used when off-duty due to military regulations, you can deduct some of the expenses associated with buying and maintaining the uniform. Realize that the amount of your deduction is offset by reimbursements and allowances you might receive.

6. Transition Expenses

Transitioning to civilian life can be tough. The IRS will allow you to deduct some of the costs associated with this change, though. Some of the expenses you may be able to deduct include resume preparation fees, agency fees, travel, and moving expenses related to the start of work at a new job location.

7. Don’t Pay Taxes on Combat Pay

Your time served as an enlisted person or warrant officer in a combat zone means that your pay isn’t taxed. In fact, if you serve in a combat zone for any part of a month, all of your military pay for the entire month is tax free. Depending on your tax bracket, those can be considerable savings. Make sure you keep records so that you aren’t paying taxes when you don’t need to.

8. Get Help with Your Taxes

Don’t go it alone when it comes to your taxes.  If you are active duty military, you may qualify to prepare your taxes using TurboTax Freedom Edition(Not to be confused with TurboTax Free Online).  TurboTax Freedom Edition is part of the Free File Alliance program in partnership with the IRS.   If you don’t meet the criteria to file your taxes using TurboTax Freedom Edition, you can use TurboTax Online.  TurboTax software guides you and easily helps you prepare your taxes.

Thank you for your service!