Friday, July 18, 2014

IRS Summertime Tax Tip 2014-07: Special Tax Benefits for Members of the Armed Forces

IRS Summertime Tax Tip 2014-07: Special Tax Benefits for Members of the Armed Forces

Lately we have not heard much good news for our military members. The following are some key facts that taxpayers who serve, or have served within this tax year (2014), may not know. 

There are some tax breaks, and other rules that affect Active Military, ROTC, Reservists, and those leaving the service to go into civilian, that military tax filers may not know. 

Publication 3 is "The Armed Forces Tax Guide." Within this guide is important information for U.S. Military Taxpayers who are stateside, and around the world.

Some breaks for our Military personnel include:
  • If you leave the military to find work, you may be able to deduct some job seeking expenses. Some moving expenses may be deductible as well. 
  • Most military bases offer Free Tax Assistance during tax season, but there are some that offer help all year long. 
  • Active duty ROTC pay is taxable, but there are some allowances during training that are not taxable. For more information, check the quick "Life Cycle" Series Fact Sheet.
  • For Reservists traveling over 100 miles from home, who incur unreimbursed travel expenses, they may be deductible.
  • Joint Returns - Signing a joint tax return, when one member of the couple is on active duty, may give an allowance for the active military member, to waive a signature. In some cases a Power of Attorney should be in place.
  • If you are out-of-pocket expenses for uniforms you may NOT wear when off duty; cleaning and purchase costs may be deductible.
  • Active Military personnel may be eligible for automatic extensions for time to file tax returns
  • If you serve in an active Combat Zone, certain pay may NOT be Taxable, and may not need to be included as income on your tax return, BUT
  • Active Military may want to check and see if adding it to the non-taxable income section of your tax return would give a higher Earned Income Credit allowance.
Always seek the help of a certified Tax Expert who is classified as an Enrolled Agent or higher, for very complicated returns. 

Some States also have Tax Credits, Allowances and Exclusion for Military personnel, so don't forget to check that, or make sure your tax professional checks this for you.

For answers to more military tax returns, order a copy of Publication 3.

I.R.S. en Espanol

Thank you for your service, and all you do.

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