Key Military Tax Info
Special Breaks And Perks For Military Members
January 28, 2015 by Mark Dye
Taxes are just an unavoidable part of modern culture and the price we all pay for living in a society. That doesn’t mean you should pay more than you should—and if you’re in the military, there are a few tax benefits you receive thanks to your service. (Note that this is general advice and might not apply to your situation. Visit the IRS website for more military-specific tax information, or speak with a tax professional.)
If you served in a combat zone for one day or more in a month, that month’s income might be deductible from your gross income (which reduces the amount of income that federal tax applies to and, thus, lowers your tax bill). This also might include any time that you’re hospitalized as a result of service in a combat zone.
If military regulations state that you can’t wear your uniform when off duty, then the costs associated with that uniform—whether to replace one that is worn out, new patches, mending, etc.—can be deducted. Just make sure to keep your receipts in case you’re audited.
Moving and travel
Frequent moves are a fact of military life, but thankfully some of those costs can be deducted from your taxes. There are even special rules about how long you have to live in a home before you have to pay taxes when the house is sold for a profit. (The IRS website has more information, as there are a number of rules concerning home sales.) And if you’re in the Reserves but have to travel more than 100 miles to fulfill your duties, some of those costs can be deducted. Make sure to speak with a professional if you’ve done any of these in the past year, as certain conditions and rules apply.
You might be able to deduct tuition and even travel expenses to school as long as it meets at least one of two key criteria:
- It has to be a requirement for you to maintain your job and/or salary, and also needs to be for a legitimate business reason (in this case, the "business" is the military)
- It maintains or improves the skills you need to do your job effectively
This means that you can’t deduct costs to learn skills for a new job, or to learn the most minimum requirements so you can do your current job. It has to be focused on improving the skills you have because your business (or the military) needs those skills.
April 15 is the day taxes are due for civilians, but military members stationed overseas get an automatic extension to June 15. While this won’t change how much tax you owe, it might help you save enough for your tax bill if you wind up owing money to Uncle Sam. (If you’re getting a refund, file as early as you can so you get your money back sooner.)
Keep in mind that almost every military installation has some sort of financial adviser who can help you do your taxes. If you’re not sure, ask your commanding officer, as he or she can point you in the right direction. Also note that some private companies offer discounted (or even free!) tax assistance to military families, so be sure to ask.