Special tax rules apply to military members on active duty that you may be unaware of. The IRS provides many tax benefits for members of the U.S. Armed Forces including those serving in combat zones. By following the special rules your federal taxes can be lowered and filing your tax return can become a much simpler process. Here are the benefits that you can receive as a military member:
1. Deadline Extensions. You can postpone some tax deadlines including automatic extensions if you are a qualifying military member. This includes those serving in a combat zone.
2. Combat Pay Exclusion. You can exclude combat pay from your income if you serve in a combat zone. Because qualified pay isn’t included in the wages reported on your W-2 you won’t need to show the exclusion on your tax return. Some service outside a combat zone also qualifies for this exclusion.
3. Earned Income Tax Credit. To figure your EITC you can choose to include nontaxable combat pay as earned income. This choice may increase your credit but will need to be reviewed annually.
4. Moving Expense Deduction. You may deduct some of your unreimbursed moving costs if you move due to a permanent change of station.
5. Uniform Deduction. The costs and upkeep of certain uniforms that regulations prohibit you from wearing while off duty may be deducted. You must reduce your expenses by any reimbursement you receive for these costs.
6. Signing Joint Returns. Both spouses normally must sign joint income tax returns. However when one spouse is unavailable due to certain military duty or conditions the other may in some cases sign for both spouses or will need a power of attorney to file a joint return.
7. Reservists’ Travel Deduction. As a member of the U.S. Armed Forces Reserves you may deduct certain travel expenses on your tax return. Unreimbursed expenses for traveling 100 miles away from home to perform your reserve duties may also be deducted.
8. Nontaxable ROTC Allowances. Educational and subsistence allowances 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.
9. Civilian Life. You may be able to deduct certain job hunting expenses after leaving the military including travel resume preparation fees job placement agency fees and moving expenses.
Becoming aware of what’s available to you as a U.S. Armed Forces member may help you save money on your taxes and provide you with some benefits that you didn’t know you could take advantage of. For more information on your 2013 taxes contact Lindemeyer and see what additional benefits are available to you as a military member.