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Top 9 Commonly Missed Tax Benefits for the Military

Posted on August 23, 2013 by
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US flagThere are dozens of tax benefits that are commonly overlooked by people every year. Many of these common benefits will apply to military personnel as well. However, this list will focus on the benefits that are expressly related to military personnel and their families.

ROTC Payments

If you’re receiving an allowance as an ROTC student participating in advanced training, you can write that off on your taxes. However, this does not apply to other pay you may receive, such as active duty pay.

Travel Expenses

Your travel expenses may be deductible if you’re in the National Guard or military reserve. When you are required to be away overnight and travel more than 100 miles from home, there are several travel expenses you can deduct. This includes half the cost of your meals, the full cost of your accommodation, and a set rate for your mileage. In 2013, the mileage rate is 56.5 cents per mile, plus parking and tolls.

Combat Pay

This is a very important item on your tax forms. Pay that is received during any month you are serving in a combat zone is not taxable. Military officers may have a cap on their tax-free pay, but this does not mean you should not list this pay on your tax forms. The untaxed combat pay can be used to help you qualify for the Earned Income Tax Credit which will further lower your tax burden.

Filing Costs

You may run into some costs filing your tax documents. This may include filing extensions, payment extensions, and claims extensions. All of these expenses related to filing your taxes and paying your taxes can be deducted from your return. Additionally, military personnel serving in a combat zone automatically qualify for a 180 day extension beyond the normal deadline on April 15th. If you are hospitalized due to injuries sustained in a combat zone there are similar extensions that can be used.

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Military Uniforms

Any uniforms you are prohibited from wearing when you’re off duty can qualify for a tax deduction. This includes the cost of purchasing the uniforms as well as their cleaning and upkeep. However, you will need to subtract your uniform allowance from this deduction.

Joint Returns

When one spouse is not available to sign a joint income tax return, a power of attorney can be used. This allows another party to sign for you when you’re away on active duty. Power of attorney can be given to anyone, a friend, family member, attorney, or spouse, and they will be given authority to sign legal documents on your behalf.

Decedent’s Tax Liability Forgiveness

If a member of the military dies while in active service in a combat zone, their tax liability can be forgiven. Alternatively, if it’s already paid then you can seek a refund. Keep in mind that when filing a joint return, only the decedent’s portion of the tax liability is eligible.

Job Hunting

When you’re out done with your military service and hunting for a civilian job, many of these job hunting expenses are deductible. This includes resume preparation fees, outplacement agency fees, and some travel expenses.

Moving Expenses

In some cases, moving expenses associated with an active duty permanent station change will be reimbursed to you directly. However, there may be some expenses that are not reimbursed and can be deducted from your taxes. Additionally, when you are out of the military you may qualify for moving expenses related to starting a new job in a new location. There are many requirements that determine which moving expenses qualify for a tax deduction and which do not. It’s best to use tax software to determine which moving expenses you can write off.

Taxbrain’s self-guided, flexible questionnaire asks you as series of questions. Based on your answers, it determines which tax credits and deductions are available for your situation. Get your free Taxbrain account today, and get the refund you deserve.

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