Being a member of the armed forces means your life is very different from that of a civilian, and tax time is no exception. Military personnel are entitled to certain tax deductions that others may not be able to claim. Properly claiming these military tax deductions can help you maximize your refund, getting you more money back at tax time.
In general, moving expenses are easier to deduct for military personnel than for civilians: that’s because the rules for claiming these deductions are a little more lenient for military personnel. If you have a permanent change of station, you do not have to meet the distance and time requirements civilians do and can deduct unreimbursed expenses related to the move.
In addition, you may not have to pay taxes on the profits from selling your main residence if you have lived there for at least two years and you’re moving as the result of a PCS. This is particularly good news for those military members who enjoyed a substantial profit from home sales.
The cost for the upkeep of uniforms that you cannot wear while off duty is eligible for deduction. Don’t forget to reduce the amount you deduct by any reimbursement you have received for these costs.
Reservists can deduct expenses for traveling farther than 100 miles from home to carry out duties. You can do this as an adjustment to income rather than as an itemized deduction.
Active-duty personnel can deduct unreimbursed work-related travel expenses when traveling from a permanent duty station.
Work-related education expenses are deductible in a few instances.
- The education is required by an employer or the law to maintain a certain salary, job, or status
- The education builds upon the skills necessary for your present line of work
- This schooling cannot be to meet minimum job qualifications or to seek a new trade
Any tuition assistance or GI Bill funds you receive to help pay for your education may impact the military tax deductions available to you.
Earned income tax credit
If it would increase your EITC, you can include nontaxable combat pay as earned income. The combat pay remains nontaxable, though.
Combat zone particulars
Those serving in combat zones automatically receive 180 extra days to file. You can also exclude certain combat pay from your income when figuring your taxes.
Return to civilian life
Certain job-hunting expenses you may incur after leaving the military may be deductible, including resume preparation and headhunters’ fees.
Tax time is taxing enough. With these military tax deductions, you can make the most of your return and ensure you get the full amount of money to which you are entitled.
What is your best tip for maximizing your refund? Share your tips in the comments.
Tax-preparation help Intuit offers an edition of its popular TurboTax software designed specifically for active duty military personnel and their families. Many military bases also offer free tax assistance (both preparation and filing) during tax season. You have enough on your mind prior to deployment. Download this Military Deployment To-Do Worksheet to help you make quick work of the many steps necessary to take care of before your departure.
Intuit offers an edition of its popular TurboTax software designed specifically for active duty military personnel and their families. Many military bases also offer free tax assistance (both preparation and filing) during tax season.
You have enough on your mind prior to deployment. Download this Military Deployment To-Do Worksheet to help you make quick work of the many steps necessary to take care of before your departure.