Tax Tips for Active and Former Military Members.
If you are an active or former member of the US military, thank you for your service. Your career is unique, and so are your taxes. At Lowe Levinson Financial Solutions, we want to help make sure that our heroes receive all the tax benefits they’re entitled to.
The IRS has specific tax benefits available to the military community. Below are some of the tax benefits that you should be aware of:
Travel Expense Deductions
If you are a member of the reserves and you travel more than 100 miles away from home for business, you can deduct your unreimbursed travel expenses on your tax return.
Moving Expenses
Active-duty service members moving due to a military order may be eligible to deduct qualified moving expenses. Civilians and most others cannot deduct moving expenses under the current tax law. These deductions can significantly reduce your tax liability. Be sure to keep thorough documentation of your eligible expenses.
Combat Zone Pay
You may be able to exclude pay for service in a combat zone even though that pay would otherwise be taxable.
Automatic 2-month Extension
If you are a U.S. citizen or resident alien, you qualify for an automatic 2-month extension of time without filing Form 4868 if either of the following situations applies to you:
- Situation 1. You live outside the United States, and your main place of business or post of duty is outside the United States
- Situation 2. You are in military or naval service on an assigned tour of duty outside the United States for a period that includes the entire due date of the return.
Other Extensions Available
If you aren’t in a combat zone or a contingency operation, you may still be eligible for an extension of time to file your return. You can either file Form 4868 for an automatic 6-month extension or pay all of your expected tax due.
Disability Severance Payments to Veterans
Veterans discharged from military service due to medical disability may receive a severance payment. If you received a disability severance payment that was incorrectly taxed, you can file a claim for credit or refund using Form 1040-X for that tax year.
