What are the Tax Obligations of American Military Members?

November 11, 2013
American military members have unique requirements for handling their IRS taxes.

Members of the U.S. military have special requirements on how to handle their IRS taxes.

Are you a member of the United States armed forces? Do you have a family member or a friend who proudly serves our nation and defends our freedom? On this Veterans Day, it is worth noting the unique aspects of how American military members handle their taxes with the IRS.

Special Tax Exemptions & Tax Deductions

Those who serve in the Army, Navy, Marines, Air Force, and Coast Guard are on the hook for paying federal income taxes just like their civilian counterparts are. However, members of the military are generally eligible for special tax exemptions and tax deductions. For example, active duty members who are required to relocate to a different area for purposes of military service can deduct moving expenses related to this process. Although the military often picks up the tab on these moving expenses, there may be some underlying costs that are not covered but are deductible.

Tax Deductible Military Clothing

Each branch of the military issues uniforms to its members. Some of these uniforms are camouflage outfits used during combat missions, while others are formal suits and dresses that are often worn at special functions. The military provides a monthly allowance to members for upkeep of this clothing. Any costs that exceed this monthly allowance amount are generally tax deductible. This is because these costs are considered unreimbursed employee expenses, much like a regular citizen may be able to claim on his or her tax return.

Income Exclusions

Military members who are stationed in combat zones also have the ability to exclude certain forms of pay from their tax returns, meaning it is income that is not taxable. Enlisted members and warrant officers can take advantage of this tax-saving exemption. Income earned in combat, imminent danger, or hostile fire zones is eligible for this exemption. In addition, any service members who are hospitalized due to injury in these areas and continue to receive military pay can exclude these forms of income from being taxed.

Veterans and Taxes

The military also offers a transition program for those who leave the military and transition back into civilian life. Many of the expenses associated with this program are often tax deductible and may include travel expenses, resume assistance costs, and job placement fees. On a related note, businesses that hire veterans who served in the military can receive tax breaks, such as the Work Opportunity Tax Credit.

Tax Extensions for Military Members

Finally, since members of the military are often away from home in many cases, they may qualify to receive an extension on filing their tax returns with the IRS and claiming tax refunds without a penalty. This extension normally ranges from 60 to 180 days for qualified military personnel, most of whom serve in combat zones. Generally speaking, however, a large percentage of armed forces members must meet the traditional tax-filing deadlines of the IRS.

If you are a military member, a small business owner, or an individual looking for information on handling your specific taxes, be sure to contact 1-800Accountant today. Call 1-888-749-0117 or check out www.1-800Accountant.

Photo credit: The image of the American flag is used with permission via the Creative Commons license from Flickr.

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