Tax Perks for Serving Uncle Sam

By Debbie Gregory.

The government does offer some special tax perks so that those who serve don’t have to add income taxes to their list of worries.

When it comes to filing tax returns, military service members have circumstances that differ from civilian tax payers. Due to the varied types of pay service members receive, it is important to identify the types of pay and allowances that are not considered gross income. These exclusions generally include allowances for housing, travel, relocating, combat  pay and death allowances. While not subject to tax, they still may have to be detailed when filing the tax return.

Work-related travel expenses (such as business-related meals, lodging, laundry, and business phone calls) that have not been reimbursed are deductible when you are traveling away from your permanent duty station for longer than an ordinary day’s work and you need sleep or food

Armed Forces Reservists who travel more than 100 miles away from home in connection with their service can deduct travel expenses as an adjustment to income.

Service members on active duty who move due to a permanent change of station are entitled to a deduction for reasonable non-reimbursed moving expenses related to travel and the cost of moving household goods and personal effects.

If you are a member of the Armed Forces serving in a designated combat zone, then you can exclude certain pay from your income. The month for which you receive this pay must be a month in which you either served in a combat zone or were hospitalized as a result of wounds, disease, or injury obtained while serving in the combat zone. You need only serve for one or more days in a month to qualify for exclusion for the entire month.

Members of the military serving in combat zones get an automatic 180-day extension from the IRS for filing tax returns, paying taxes and filing refund claims. The automatic extension also applies to making qualified contributions to an IRA. However, this exception does not apply to Social Security and Medicare taxes.

And one final tax perk: free tax preparation is available through MyFreeTaxes for qualified Veterans, active-duty military, and their families. In addition to e-filing, MyFreeTaxes also provides in-person help to individuals and families earning $20,000 or less in 2015. For more information, please visit: www.myfreetaxes.com.