We are extremely proud of the men and women of the United States Military. Service members and their families sacrifice a lot and face unique obstacles thrown at them daily. Understanding all of this, TaxSlayer.com wants to ensure they understand special tax benefits that are available to them.
We want them to be aware of 9 commonly missed tax benefits:
1. Moving Expenses
You may be able to deduct some of your unreimbursed moving expenses, if you are a member of the Armed Forces on active duty and you move because of a permanent change of station. You can also deduct moving expenses if you are out of the military and your move is closely related to the start of a new job location, and you meet certain tests.
2. Combat Pay
Most enlisted military personnel or warrant officers know that if they serve in a combat zone for any part of a month, that all their pay received for military service during that month is not taxable. Military officers are eligible to receive tax free pay as well but it could be capped at the highest enlisted pay, plus hostile fire or imminent danger pay received. One little known fact is you can elect to include your nontaxable combat pay in your ‘earned income’ for purposes of claiming the Earned Income Tax Credit.
3. Extension of Deadlines
Qualifying members of the military can get an automatic extension for filing tax returns, paying taxes, filing claims for refund, and taking other actions with the IRS.
4. Military Uniform Cost and Upkeep
You can deduct the cost and upkeep of uniforms that military regulations prohibit you from wearing when off duty. If you receive any allowance or reimbursement for the services you receive you will need to reduce your expenses by those amounts.
5. Joint Returns
A power of attorney may be used on joint income tax returns if one spouse is unavailable due to military duty.
6. Travel to Reserve Duty
If you are a member of the US Armed Forces Reserves, you can deduct unreimbursed travel expenses for traveling more than 100 miles away from home to perform your reserve duties.
7. ROTC Students
Subsistence allowances paid to ROTC students participating in advanced training are not taxable. However, active duty pay – such as pay received during summer advanced camp – is taxable.
8. Job hunting expenses
You may be able to deduct some costs you incur while looking for a new job after separating from the military. Expenses may include travel, resume preparation fees, and outplacement agency fees.
9. Forgiveness of Decedent’s Tax Liability
Tax liability can be forgiven, or if already paid, refunded, if a member of the U.S. Armed forces dies while in active service in a combat zone; from wounds, disease, or other injury received in a combat zone; or from wounds or injury incurred in a terrorist or military action. If filing a joint return only the decedents part of the joint income tax liability is eligible for the refund or tax forgiveness.