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Armed Forces Tax Filing Tips and Dates: Military Personnel, Veterans & Their Families & Navy Voluntary Income Tax Aid

Armed Forces Tax Filing Tips and Dates: Military Personnel, Veterans & Their Families & Navy Voluntary Income Tax Aid

Tax benefits are available for military personnel and their families. However, these tax benefits are often overlooked. For example, any monthly military payment earned during a combat zone or any payment for hostile fire and imminent danger is tax-exempt. Some military requirements can be deducted, such as the purchase of uniforms or equipment. Moving costs can also be partially written off. This is a big tax advantage for military personnel who move from base to base quite often. This advantage also applies to temporary movements. Travel expenses for reserve duties over 160 km are also tax-deductible.

Due to the stress and high demands associated with military life, the I.R.S. offers extended deadlines for any military member to file their tax return or pay their tax obligations. The I.R.S. publication 3, The Armed Forces Tax Guide, contains helpful information that describes many of the tax benefits available to military personnel and families. 

Extensions, terms, and conditions of the internal revenue service:

The I.R.S. announced that it began accepting and processing federal tax returns for fiscal 2020 on Friday, February 12, 2021.


Tips for taxpayers of armed forces to make filing easier:

The I.R.S. urges taxpayers to take the following steps to avoid unnecessary delays in processing and issuing refunds:

  1. Register electronically and use direct deposit for faster refunds.

  2. For those who have already received or may qualify for stimulus payments:

  • Taxpayers who have automatically received the maximum refund amount should not include any information about their payments in the tax return.

  • Taxpayers who have not received a payment or who have received only a partial payment may be eligible to claim a refund on the 2020 tax return. 

  • Advance stimulus payments received are not taxable and do not reduce the taxpayer's refund when filing their 2020 federal income tax return.


Important filing season date that armed forces taxpayers should note:

There are several important facts taxpayers should keep in mind this financial season:

  • January 15 - The I.R.S. free file was opened, and taxpayers were asked to prepare their returns immediately, but the actual filing with the I.R.S. was postponed until February 12.

  • January 29 - Income Tax Credit Awareness Day to raise awareness of the valuable tax credits available to many people, including the ability to use the previous year's income to qualify.

  • February 12 - tax season opened for the tax year 2020. The I.R.S. began accepting completed returns for processing.

  • February 22 - IRS.gov Where is my refund too? For those requesting EITC and ACTC, the PATH Act becomes available.

  • March 1-7 – Tax refunds will begin to arrive for EITC applicants and ACTC (PATH Act Return) for e-filers with direct deposit whose tax returns have been approved.

  • April 15 - Deadline for filing income tax returns for 2020 without being able to request an extension.

  • October 15 - The deadline to submit 2020 T.Y. returns for those who have requested an extension.


Tax resources for military personnel, veterans, and their families:

The I.R.S. has a variety of resources to help military personnel, veterans, and their families deal with tax returns while in the military. 

  • Earned Income Tax Credit: The military must also review the special EITC rules. When applied to your tax situation, it may result in a higher refund. 

  • I.R.S. Free File: Taxpayers who are not eligible for MilTax have other options for preparing and filing free federal tax. Those earning less than $ 72,000 in 2020 can use I.R.S. Free File software. Any taxpayer who feels comfortable filling out their digital tax forms can use the free filing forms regardless of income. 

  • Military tax benefits: Military status can affect a taxpayer's eligibility for certain military tax benefits. 

  • MilTax: Members of the military and qualified veterans can prepare and submit their fees electronically through MilTax. 

  • Tax advantages of the combat zone benefits: there are specific rules for those who serve in the combat zones. These taxpayers and their families can find more information by discussing with a tax professional.


Navy Volunteer Income Tax Assistance

The Navy VITA program will operate a single tax assistance center at the Recruit Training Center (R.T.C.), Great Lakes, Illinois. Veterans may be eligible for free tax assistance in various locations across the country. Some community organizations have age or income requirements. 

The R.T.C. Self-Service T.A.C. will allow clients to prepare and report their taxes using I.R.S. Military OneSource (MoS) or Free File Alliance software, with IRS-certified volunteers.

For people who cannot enter the self-service T.A.C. or who prefer to file from home, there is free access to the MoS software through a personal computer or tablet. The software was made available on January 19, 2021.

For tax return preparation, taxpayers will need the following:

  • Adjusted gross income (A.G.I.) from last year's tax return 

  • All tax documents at the end of the year (1099)

  • Income data (W-2)

  • I.R.S. e-filing P.I.N. (you can get one from irs.gov or call the I.R.S. at 866-704-7388)

  • Payment receipts for childcare

  • Receipts for educational expenses 

  • Social security numbers (including spouse and children)

  • Student loan payment information

  • Tax number or social security number and address of the child care provider

  • Valid Identification for taxpayers


Armed Forces Tax Guide

What is the armed forces tax guide (Publication 3)?

The Internal Revenue Service Publication 3, The Armed Forces Tax Guide, or The I.R.S. Publication 3 is a document issued by the I.R.S. that describes special tax considerations for serving the United States military members. It is part of a series of publications that explain how the I.R.S. works.


Understanding the Armed Forces Tax Guide

I.R.S. Pub. 3 covers both regular and reserve personnel headed by the Secretaries of Defense, the Army, Navy, Air Force, and the Coast Guard. Neither the Red Cross nor the Marines are included. The tax guide details how and when active-duty soldiers are required to file their income tax returns and covers several topics specifically related to military service.


Taxable income 

Members of the armed forces receive different allowances and payments, such as exclusion from the combat zone, which are not treated as normal income. The Armed Forces Tax Guide describes the taxable items. The taxable income shown in the guide includes, among other benefits, basic payment for active service, reserve training, service training, and exercises. It also includes special payments, such as overseas services or medical and dental personnel, as well as bonus payments, incentive payments, and other payments, including student loan repayment for certain programs, high daily implantation rates, and an accumulated license.

Income that can be excluded from gross income includes combat salaries, family allowances, which include certain expenses for children and emergency education, travel allowances, moving allowances, and death allowances. The Armed Forces Tax Guide also covers tax credits, such as child tax credits and income credit.


Tax Deductions Addressed in I.R.S. Publication 3

The guide clarifies the military's doubts about business expenses and when they can claim a tax deduction. For example, a section titled "How to Report My Reserve-Related Travel Expenses" helps service members understand if they are eligible to claim business meal expenses when living overseas as part of their assignment allowance. The guide also describes the types of military expenses they may charge for travel, transportation, uniforms, and educational activities.


I.R.S. Publication 3 Filing Instructions

The Armed Forces Tax Guide also includes all the logistical details of the filing. It explains how and when the military can file the tax return in various situations, for example, whether they are overseas or in a combat zone. This guide also provides military personnel with information on tax filing extensions, including who is eligible for an extension, how long an extension lasts, and how to get it.

This specific tax guide does not cover veterans' benefits or military pensions. These are covered by IRS 525.


FOR MORE INFORMATION OR TO SEE HOW UNIVERSAL ACCOUNTING & FINANCIAL SERVICES, INC. CAN BEST HELP YOU WITH YOUR TAX FILING NEEDS, PLEASE CLICK THE BLUE TAB ON THIS PAGE.


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