Note to Editor: This is the first in a series of
reminders to help taxpayers prepare for the upcoming tax filing season.
WASHINGTON – As tax filing season approaches, the Internal Revenue Service
wants members of the military and their families to know about the special tax
benefits available to them.
IRS Publication
3, Armed Forces Tax Guide, is a free booklet packed with valuable
information and tips designed to help service members and their families take
advantage of all tax benefits allowed by law. Here are some of those tax
benefits.
- Combat pay is partially or fully tax-free. Service
members serving in support of a combat zone may also qualify for this
exclusion.
- Reservists whose reserve-related duties take them more
than 100 miles from home can deduct their unreimbursed travel expenses,
even if they don’t itemize their deductions.
- The Earned
Income Tax Credit may be worth up to $6,269 for low-and
moderate-income service members. A special computation method is available
for those who receive nontaxable combat pay. Choosing to include it in
taxable income may boost the EITC, meaning owing less tax or getting a
larger refund.
- An IRA or 401(k)-type plan might mean saving for
retirement and cutting taxes too. Service members who contribute to a
plan, such as the Thrift Savings Plan, may also be able to claim the
Retirement Savings Contributions Credit.
- An automatic extension to file a federal income tax
return is available to U.S. service members stationed abroad. Also, those
serving in a combat zone typically have until 180 days after they leave
the combat zone to file and to pay any tax due. For more information see Miscellaneous
Provisions — Combat Zone Service.
- Most military bases offer free tax preparation and
filing assistance during the tax filing season. Some also offer free tax
help after the April deadline. Service members who prepare their own
return qualify to e-file their federal return for free using IRS Free
File.
- Both spouses normally must sign a joint income tax
return, but if one spouse is absent due to certain military duty or
conditions, the other spouse may be able to sign for him or her. A power
of attorney is required in other instances. A military installation’s
legal office may be able to help.
- Those leaving the military and looking for work may be
able to deduct some job search expenses, such as the costs of travel,
preparing a resume and job placement agency fees. Moving expenses may also
qualify for a tax deduction.
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