Armanino Blog
Article

Military Tax Benefits: Tips for Current and Former U.S. Service Members & Spouses

November 11, 2014

Updated August 11, 2022

The liberty to write this blog and disseminate its information freely for the masses to read without the fear or threat of incarceration (or worse), is an incredible right afforded us in the U.S. Constitution. For more than 225 years, thousands of men and women have fought for our ability to continue to take advantage of these sometimes taken-for-granted rights. And some have paid the ultimate price for our freedom.

Our government owes our veterans so much more than we can ever give them, but some of the special tax benefits afforded to members of the U.S. Armed Forces are a good start. Here we cover some of these benefits.

10 Tax Benefits for U.S. Military


1. Deadline Extensions

Some members of the military, such as those who serve in a combat zone, can postpone some tax deadlines. If this applies to you, you can get automatic extensions of time to file your tax return and to pay your taxes..

2. Combat Pay Exclusion

If you serve in a combat zone, certain combat pay you get is not taxable. You won’t need to show the pay on your tax return because combat pay isn’t included in the wages reported on your Form W-2, Wage and Tax Statement. Service in support of a combat zone may qualify for this exclusion..

3. Earned Income Tax Credit (EITC)

If you get nontaxable combat pay, you may choose to include it to figure your EITC. You would make this choice if it increases your credit. Even if you do, the combat pay stays nontaxable.

4. Moving Expense Deduction.

You may be able to deduct some of your unreimbursed moving costs. This applies if the move is due to a permanent change of station.

5. Uniform Deduction

You can deduct the costs of certain uniforms that regulations prohibit you from wearing while off duty. This includes the costs of purchase and upkeep. You must reduce your deduction by any allowance you get for these costs..

6. Signing Joint Returns

Both spouses normally must sign a joint income tax return. If your spouse is absent due to certain military duty or conditions, you may be able to sign for your spouse. In other cases when your spouse is absent, you may need a power of attorney to file a joint return..

7. Reservists’ Travel Deduction

If you’re a member of the U.S. Armed Forces Reserves, you may deduct certain costs of travel on your tax return. This applies to the unreimbursed costs of travel to perform your reserve duties that are more than 100 miles away from home.

8. Nontaxable ROTC Allowances

Active duty ROTC pay, such as pay for summer advanced camp, is taxable. But some amounts paid to ROTC students in advanced training are not taxable. This applies to educational and subsistence allowances.

9. Civilian Life

If you leave the military and look for work, you may be able to deduct some job hunting expenses. You may be able to include the costs of travel, preparing a resume and job placement agency fees. Moving expenses may also qualify for a tax deduction.

10. Tax Help

Most military bases offer free tax preparation and filing assistance during the tax filing season. Some also offer free tax help after April 15.

For more on this topic, refer to Publication 3, Armed Forces’ Tax Guide. It’s available on IRS.gov or call 800-TAX-FORM (800-829-3676) to get it by mail.

U.S. Military Statuses Explained

Active Duty — A person who serves in the military full-time

Veteran — A person who served in any military branch and who was discharged or released under conditions other than dishonorable

Retired — In the Navy and Marine Corps, a retired military member is someone who is an enlisted member with over 30 years of service. In the Air Force and Army, a retired military member is someone who has over 20 years of service.

For further questions or assistance, contact our experts.

Stay In Touch

Sign up to stay up-to-date with the latest accounting regulations, best practices, industry news and technology insights to run your business.

Resources
Related News & Insights
Trust and Estate Planning Guide
Article
Now is the time to identify tax-saving opportunities, protect your legacy and take charge of your estate plan.

May 10, 2024
3 Tax Strategies for Growing Businesses: Are You Missing Out?
Article
FOMO’s the worst, right? When it comes to your business, you could be missing significant tax savings.

April 23, 2024
Most Businesses Are Leaving Tax Credits Unclaimed. Is Yours?
Article
Watch for these commonly overlooked credits and beware these tax credit missteps.

March 15, 2024