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Summer Tax Tip: Special Benefits for Armed Forces Personnel

July 19, 2012

Because military personnel have unique challenges in relation to duties, expenses, and transitions, the IRS offers active members of the U.S. Armed Forces special tax benefits. The following are a few of these benefits of which you may not be aware:

  1. 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 may be able to deduct some of your unreimbursed moving expenses.

  2. Combat Pay—If you serve in a combat zone as an enlisted person or as a warrant officer for any part of a month, all military pay received for military service during that month is not taxable. For officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received.

  3. Extension of Deadlines—The deadline for filing tax returns, paying taxes, filing claims for refund, and taking other actions with the IRS is automatically extended for qualifying members of the military.

  4. Uniform Cost and Upkeep—If military regulations prohibit wearing certain uniforms when off duty, you can deduct the cost and upkeep of those uniforms. However, you must reduce your expenses by any allowance or reimbursement you receive.

  5. Joint Returns—Joint income tax returns typically must be signed by both spouses. However, when one spouse is unavailable due to military duty, a power of attorney may be used to file a joint return.

  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 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. Transitioning Back to Civilian Life—You may be able to deduct some incurred costs while looking for a new job. Expenses may include travel, resume preparation fees, and outplacement agency fees. Moving expenses may be deductible if your move is closely related to the start of work at a new job location and you meet certain tests.

  9. Tax Help—Most military installations offer free tax filing and preparation assistance during and/or after the tax filing season.

  10. Armed Forces’ Tax Guide (Publication 3)—Offers an excellent resource, summarizing many important military-related tax topics. Publication 3 can be downloaded from IRS.gov.

As always, if you have any questions, please call our office. We hope you are having a wonderful summer!

Information provided by irs.gov.

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