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Special Tax Benefits for Members of the Armed Forces

Posted by Cailey Taylor on Jun 8, 2018 9:07:00 AM

Although no amount of tax breaks could truly thank members of the military for their service, the IRS does offer a few tax breaks to help take the tax burden off military members and their families. There are also special rules that could lower the amount of taxes they owe or give them more time to file and pay taxes. Here are a few benefits for military members and their families:

Combat Pay Exclusion

If someone serves in a combat zone, part of or even all of their combat pay is tax-free. This applies to people working in an area outside a combat zone when the Department of Defense certifies that area is in direct support of military operations in a combat zone. It’s important to note there are limits to this exclusion for commissioned officers.

Deadline Extensions

Some members of the military, such as those who serve in a combat zone, can postpone most tax deadlines. If you qualify, you can get an automatic extension of time to file and pay your taxes.

Earned Income Tax Credit

If you get nontaxable combat pay, you can choose to include it in your taxable income to increase the amount of your Earned Income Tax Credit. This means you could either, owe less in taxes or get a larger refund after you file your taxes.

Signing Joint Returns

If you are married filing joint, you and your spouse both have to sign a joint income tax return. If one spouse is in the military and their service prevents that, one spouse may be able to sign for the other or get a power of attorney.

ROTC Allowances

Some amounts paid to ROTC students in advanced training are not taxable. This applies to allowances for education and subsistence. Active duty ROTC pay is taxable. For instance, pay for summer advanced camp is taxable.

 

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