Special Tax Benefits for Armed Forces Personnel

Military personnel and their families face unique challenges in their lives with their obligations, expenses and transitions. The IRS wants members of active duty in the U.S. Armed Forces to be  aware of any special tax benefits available to them.

Here are 10 of these special military tax benefits:

  1. Military Moving Expenses-If you are a member of the Armed Forces on active duty and you move because of a permanent change of headquarters, taxpayers could deduct part of their unreimbursed moving expenses.
  2. Military Combat Pay – If you serve in a combat zone as an enlisted person or as a warrant officer for any portion of a month, all your military pay received for that month is not taxable. For officers, the monthly exclusion is limited to the listed highest pay, plus any hostile pay received by heat or imminent danger. Taxpayers can also choose to include their nontaxable combat pay on their “earned income” for purposes of the Earned Income Credit.
  3. Automatic Extension of Deadline– The deadline for filing tax date, pay taxes, submit redemption requests, and take other actions with the IRS is automatically extended for qualified military members.
  4. Military Uniform Cost and Maintenance -If military regulations prohibit you from wearing certain uniforms when off duty, you can deduct the cost and upkeep of those uniforms, but you must subtract your expenses by any allowance or reimbursement you receive from government.
  5. Joint Tax Returns –  Generally, tax returns for joint income must be signed by both spouses. However, when a spouse is unavailable due to military service, power of attorney may be used to file a joint return without the other spouses signature on it.
  6. Travel Expense Deductions -If you are a member of the Reserves of U.S. Armed Forces, you can deduct travel expenses that are not reimbursed for travel more than 100 miles from home for duty reservist.
  7. ROTC Student Subsidies-  Stipends paid to ROTC students participating in advanced training are not taxable. However, active duty pay – such as pay received during summer advanced camp – is taxable.
  8. Transition Back to Civilian Life- You may deduct certain costs incurred while looking for a new job. Expenses may include travel, fees for preparing the resume, or  using an employment agency. Moving expenses may be deductible if your move is closely related to the start of work on a new place of employment, and you meet certain tests.
  9. Free Tax Help – Most military installations offer free assistance in preparing and filing taxes during and / or after the tax season.
  10. Tax Information IRS Publication 3, Armed Forces’ Tax Guide is an excellent resource that summarizes many important tax issues related to military service. Publication 3 can be downloaded from www.irs.gov or can be ordered by calling 800-829-3676.