Hard Fought Military Tax Deductions Are Well Deserved
Filing taxes is something just about every person must do once they begin receiving income, including military personnel. There are some exceptions to this rule. Those exceptions include individuals that are outstationed or serving in a combat zone. For those that do have to file taxes, there are a large number of military tax deductions and tax breaks available.
It is essential that you know which of those are available to you at the start of a new tax year. Continue reading to find out more about what is available to you.
Combat Pay
If you are serving in a combat zone, one of the top military tax deductions you should keep in mind is to help exclude a certain amount of pay from your income.
You can use it when you have been hospitalized from the wounds, injuries, or diseases as a result of serving in a combat zone.
You only need to serve for just one day in a month for the discount to count in a month.
You can also receive a deduction for active duty pay you receive for any time you are in a combat zone.
In addition, you can receive a deduction for hostile fire or imminent danger pay.
This deduction also counts for reenlistment bonuses for an extension given in any month in a combat zone.
You are eligible for deductions for any accrued leave pay you earn while serving in the combat zone.
For you to receive this deduction, you may use it only for the month(s) in which you serve in a combat zone !
Anyone working in a combat zone may be eligible for their compensation to be completely tax free or partially tax free.
Moving And Selling a Home
MOVING
Selling
You can receive military tax deductions when you move or sell a home. There are some criteria for these deductions. If you are on active duty and must move as a result of a permanent station change, there are some deductions available to you. These deductions occur for expenses that are a result of unreimbursed and reasonable moving costs. It can also cover the expenses related to travel for the move.
In general, when a homeowner sells a house, that person can avoid paying taxes on capital gains if they had this home as the primary residence for two out of five years before the sale of the house. For those in the military, they can suspend that period of time for as long as ten years instead of five. They must be on extended duty, which means they are further away than 50 miles for at least 90 days.
Travel
Whenever you have to travel over 100 miles away from your duty station, which requires you to stay overnight as a member of National Guard or reserves, you can receive a tax deduction.
You are able to deduct the amount of money you spend on this type of travel.
You are able to deduct lodging, travel, and 50 percent of meals.
Other possible deductions include phone calls related to business and laundry. It is critical that you do not deduct more expenses than what is allowed per the federal per diem.
Overseas travel is not able to be deducted when you are stationed overseas.
Transportation
It is possible that you may be able to deduct the cost of transportation from one place of work to another. For example, if you have to attend a meeting that is not at your regular place of work, you may be able to deduct those costs.
Any expenses that you have as a result of traveling to your regular place of work are not eligible for a tax deduction.
However, if you have expenses as a result of overnight travel, you may be able to deduct those expenses.
Education
It is possible that you can deduct the cost of education that is related to work.
The education must fall into one of two criteria outlined by the Internal Revenue Service (IRS) to count as a deduction:
Those two criteria include that the education must be required by the employer or legally to keep your job, income, or status. The education must also serve a legitimate purpose from your employer.
The other criteria includes that the education creates or builds a skill that you need to do your current job.
With either of these criteria, the education is not just to meet the minimum requirements of the job. It also cannot be used to obtain a new job, business, or occupation. There could be instances when the travel used to get to the training may also be deducted. There are other expenses that may be deducted.
There are also some allowances and deductions that are allowed for Reserve Officers' Training Corps (ROTC) students. They must be in advanced training. The active duty pay for ROTC students is taxable.
Military Uniform
Essentially, you must be prohibited from wearing the uniform while off duty !
The military uniform that you purchase may be eligible for a tax deduction, but not always. The military uniforms that you purchase must not be eligible for wear while off duty.
You can also deduct the cost of cleaning and maintenance of the uniform. You will have to put those costs in the itemized deductions section of your tax return. Any deduction you make must be reduced by any allowance that you receive for your uniforms.
It is essential to keep in mind that a uniform deduction will not count unless the amount is a significant amount. If it is not substantial, you may need to have additional itemized deductions. These deductions must be more than two percent of your adjusted gross income.
Extensions
Many people take advantage of requesting an extension for filing tax returns. Those who are stationed overseas or in a combat zone during the seasons for filing taxes.
Overseas
Anytime a person is serving overseas, they are given a more extended amount of time to file their tax return. This also means that the person does not have to file an extension to receive one.
However, the extension only extends until June 15.
If more time is needed, a request for an actual extension must be filed. The extension allows you until October 15 to submit the extended return.
Combat Zone
When someone serves in a combat zone, you are given a more extended amount of time to file your tax return.
The IRS gives you 180 days from the day you enter the combat zone or the last day you were hospitalized continuously as a result of injuries sustained in the combat zone.
The 180 day extension is in addition to the amount of time you have once you enter the combat zone. There are no penalties or interest charged to you during this extension period.
While you have an extension for filing your taxes, the date for paying any taxes you owe remains the same. Therefore, there is no extension for the payment you owe.
Need More Help?
Tax deductions can be confusing, and you may still need more assistance. When you have questions about your tax returns and deductions, you should not hesitate to get help. You want to find assistance, especially if it is close to when you need to file your taxes or the beginning of a new tax year. The Goalry Mall is just the place for you to visit with all your questions. We are here to help you with all financial questions. No matter if they are about debt, budgets, or saving money, Goalry has all of your answers.
Taxry is part of The Goalry Mall. This site can help you with personal or business taxes. This website connects you with professionals that can help you with your taxes and related services. We have a large number of tools online to assist you with your taxes.
For example, we offer you an income tax calculator to help you determine your liability. Our site can also assist you when deciding which tax deductions you may be eligible to receive. No longer will you spend more than you have to when it comes to taxes with professional assistance at The Goalry Mall.
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Conclusion
Taxes are a stressful time for anyone, but fortunately, they do not have to be. Once you understand all of the deductions for which you are eligible, it makes filing your taxes much more efficient. When you have the appropriate people to assist you with your tax returns, it makes handling your tax returns easier.
You also walk away knowing that you received the most deductions possible. Hiring a professional also means that you are not paying more in tax payments than you need to. It is essential that you ensure that you are following the guidelines and criteria created by the IRS when filing your tax returns.