4 Tax Tools For Active Duty Military

in Plan by Lacey Langford, AFC®

It’s that time of the year, tax time. Are you excited to get some money back? Or are you stressed you might have to pay Uncle Sam this year? The good news is, there are tax tools for active duty military to make the task of doing taxes easier. I’ve been doing my taxes since I started working at 16 years old so about five years now. Alright, it’s been a little longer than that, but the point is, I have some experience with taxes, multiple moves, and deployments. By experience, I mean deciding between home of record and home of residence or trying to figure out how to add three states to one year’s tax return. Being in the military adds a degree of difficulty doing filing taxes.  Whether you do your own taxes or just need some assistance with them, these are four tax tools available for you to use.

4 Tax Tools For Active Duty Military

Online Tax Preparation

Free TurboTax Freedom or Deluxe edition is available for E-5 and below for federal and state tax filing. E-6 and above receive $5 off all TurboTax federal filing products. Military OneSource provides income tax filing through their MilTax software and support. This software is for the military lifestyle, accounting for multiple moves and deployments. The IRS also provides free filing software for those with an adjusted gross income below $64,000. This list of free software is only available through Free File at IRS.gov

Military Installation Tax Preparation

On larger military installation, volunteers trained by the IRS will provide free filing assistance for Servicemember and their families. These volunteers get training through the IRS’ VITA program on military specific tax issues such as combat zone tax benefits and extensions. tax tools

Filing Extension

Servicemembers that are serving in a combat zone are eligible for an 180-day extension to file their federal taxes. Also, the extension can apply to the deployed member’s spouse as well.  An extension allows you the extra time you may need due to a deployment.

Earned Income Tax Credit

Military members receive non-taxable income when they deploy to a combat zone.  Also, the allowances they receive such as BAH and BAS are non-taxable.  By not having a portion of your income taxed you not only have more money each month, but it lowers the taxes you owe.   Another tax perk for the military is, the IRS allows you to choose to include these non-taxable incomes or to exclude them for Earned Income Tax Credit (EITC) purposes.  EITC is for those working with a low to moderate income.  It may reduce the taxes they owe or allow for a tax return.  Having the flexibility to choose to include or exclude non-taxable income in order to receive the best tax benefit is a great tool for the military!