Are you a member of the U.S Armed Forces? If so, then this article is for you. The Internet Revenue Services wants you to learn about the several special tax benefits that may apply to you. These special tax rules are applicable to those military members on active duty and those who are serving in combat zones. Two of the main benefits you can get is the chance to lower your federal taxes and the right to file your tax return the easier way. Since U.S militaries personnel and their families go through many challenges when it comes to their duties, expenses and moving changes, it is just right to grant them special tax benefits to help lessen their personal burden. We prepared the top 10 special tax breaks you can take as a taxpayer serving the Armed Forces.
1. Extensions on Deadlines for Federal Filing. If you’re a qualifying military member and/or serving in a combat zone, you are allowed to postpone some of the tax deadlines including the dealing for filing tax returns, tax payments, the filing of refund claims, and other tax-related actions. The extension is for 180 consecutive days provided the provisions are followed.
2. Combat Pay Exclusions. Military members serving the combat zone has the right to exclude certain combat from their income. There is no need for you to include the exclusion when filing your tax return because Forms W-2, Wage and Tax Statement does not include it under wages.
3. Earned Income Tax Credit. In order to determine your EITC, you can still choose to include your nontaxable combat pay as an income earned as long it gives you the chance to increase your credit. Doing this will not affect your nontaxable combat pay. To put it simply, you will be able to pay lesser tax or get a larger refund.
4. Moving Expenses. The general rule is that moving expenses can only be deductible if the distance to the new job location from your old home is at least 50 miles farther than your old job location from your old home. In addition to this rule, you must be an employee whose work in the area of the new job full-time for 39 of the first 52 weeks. Here’s the good news: both the required time and distance will be waived if you’re a qualifying member of the Armed Forces who is also on active duty and has to move due to a permanent change of station.
5. Uniform Deductions. As a military, you can deduct the costs and upkeep of certain uniforms that the Armed Forces prohibits you to wear when you’re off duty. In order to reduce your expenses by using reimbursements, you received for these costs.
6. Signing Joint Returns. The IRS normally require both spouses to sign joint income tax returns. Since militaries can sometimes become unavailable because of their job duties or conditions, one spouse in most cases can sign in behalf of the other. You can also have the choice to use a power of attorney to file a joint return.
7. Travel Deduction. Members of the U.S Armed Forces Reserves can deduct some of their travel expenses when filing their tax return. You can take the deduction for traveling more than 100 miles away from your home as unreimbursed expenses if it’s necessary that you perform your reserve duties.
8. Non-taxable ROTC Allowances. There will be no tax collected from educational and subsistence allowances use to pay ROTC students who participate in advanced training. Active duty pays such the pay you received when attending a summer advanced camp, however, is taxable.
9. Job Hunting Expenses Tax Deduction as a Civilian. When your career as a military ends, you will have to hunt for a new job which means you have to spend money on travel, resume preparation fees, job placement agencies, and other related expenses. Fortunately, the IRS allows you to deduct them as a job-hunting expense on your tax return.
10. Free and Accessible Tax Assistance. There are free tax preparation and filing assistance being offered at some of the military bases every tax time. The assistance can also be available after April 15th.