As a member of the U.S. Armed Forces, we salute you, and we want to thank you for serving our country. We know tax season can be stressful for everyone, and we’re here to make it a little easier for you by breaking down some of the top tax deductions, benefits, and tips for filing as a member of the military.
- Remember, not all your income is taxable
Some income you receive in the military isn’t subject to taxes. This includes combat pay and allowances for things like living/family expenses, uniforms, death expenditures, travel and moving, group-term life insurance, and education.
So what do you pay taxes on? Basic compensation, like training and active duty payment, money for bonuses or incentives, and certain types of student loan repayment.
- Deduct travel and lodging expenses
Did you travel over 100 miles and stay overnight this tax year? If you did, and you’re a member of the National Guard or Armed Forces reserve, you can claim a deduction for that—even if you didn’t itemize your deductions.
As a member of the military, you’re allowed to deduct what you spent on work-related travel and lodging, in addition to 50% of your meal cost. But be sure to check your state’s per diem rate for lodging and meals, so you don’t deduct more than you’re allowed to.
- You may be able to deduct uniform expenses
Before 2018, you could deduct the cost of military uniforms that could only be worn on duty (not off duty). Unfortunately, thanks to the Tax Cuts and Jobs Act, that’s now changed. But this deduction is still allowed in certain states like California, so it may be worth checking.
- See if you can get tax relief for extra moving expenses
The military does pay for moving costs, but you may have had a few extra expenses that weren’t covered. If so, you can deduct these without having to meet the distance and time requirements you would otherwise. Simply deduct them as adjustments to your income. There’s no need to itemize.
- Simplify by keeping your home state
Moving a lot can be a pain when it comes to filing taxes. But if your move is military-related, you can remain a resident in your home state for tax purposes—both you and your spouse.
The best part? If you live in a state with income tax but your resident state doesn’t have income tax, you likely won’t have to pay it. And if income tax is withheld from your income, you may be able to file a nonresident return and get that money back.
- Take advantage of having more time to file
If you’re living abroad or in a combat zone during tax season, you may be able to file a little later. Generally, the IRS gives you 180 days from the date of your return or, if you were injured while serving in a combat zone, within 180 days from your last date of continuous hospitalization for those injuries.
You’ll get this 180-day extension, plus the number of days you had remaining when you first entered the combat zone. So let’s say you entered the combat zone on April 1st and didn’t get back until May 1st. You would have 180 days to file, plus the 17 days you would have had on April 1st. During this time, you won’t be charged any penalties or interest.
Still, we recommend filing as soon as you can. If you’re going to need an extension, you should file for it immediately.