5 Military Tax Benefits

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Members of the United States Armed Forces qualify for some special tax benefits, including provisions related to moving for military service or serving in active duty.

Here are five benefits you should be aware of as a member of the military:

  1. Some military income and benefits are not included in taxable income.

    You do not have to pay income tax on combat pay. You also do not pay tax on many military benefits, including:

    • Group-term life insurance
    • Professional education
    • Uniform allowances
    • Death allowances
    • Certain education allowances for dependents
    • Allowances for family travel
    • Basic allowances for housing, subsistence, and overseas housing
    • Dependent care assistance
  2. You may have extra time to file your return if you are serving overseas.

    If you are a member of the troops serving overseas, you have an extra two months to file your federal income tax return. You can file your 2013 tax return any time up to June 16, 2014, without filing for an extension.

    If you are serving in a combat zone, you have even more time to file your return. You are allowed 180 days from the date you return from the combat zone, or 180 days from your last date of continuous hospitalization for injuries received while serving in a combat zone. These 180 days are in addition to the number of days you had left to file the return when you entered the combat zone.

    The IRS does not add interest or penalties to your taxes during this extension.

  3. Earned Income Credit provisions.

    Most taxpayers must live in the United States to qualify for the Earned Income Credit. However, if you are a member of the armed forces and are stationed outside the U.S. on extended active duty, you may still qualify for the Earned Income Credit.

  4. You can keep your home state for tax purposes when you are in the military.

    In the past, moving frequently for military service meant filing state income tax returns for each state in which you lived. Thanks to the Servicemembers Civil Relief Act (SCRA), you can keep your home state residence for tax purposes, regardless of where you live due to military orders. You cannot be taxed on military income by any state other than your home state. The home state you have on file with the military will withhold state income tax from your pay.

    If you are a spouse of a military member, you can also keep your home state for income tax purposes.

  5. Deduct military moving expenses.

    Most people who work as employees or as self-employed individuals must pass a time test and a distance test to deduct moving expenses. If you are in the military and you have expenses for which you are not reimbursed, you can deduct qualified expenses regardless of how long you work at the new location or the distance between your old house and your new job.

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Upcoming Tax Dates

October 11 — Employees who work for tips
If you received $20 or more in tips during September, report them to your employer - Details

October 14 — Everyone
Federal Holiday (Columbus Day) - Details

October 15 — Individuals
If you have an automatic 6-month extension to file your income tax return for 2018, file Form 1040 and pay any tax, interest, and penalties due - Details

October 15 — Corporations
File a 2018 calendar year income tax return (Form 1120) and pay any tax, interest, and penalties due. This due date applies only if you timely requested an automatic 6-month extension Details

October 15 — Partnerships
Electing large partnerships: File a 2018 calendar year return (Form 1065-B). This due date applies only if you were given an additional 6-month extension - Details

October 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in September.

October 31 — Certain small employers
Deposit any undeposited tax if your tax liability is $2,500 or more for 2018 but less than $2,500 for the third quarter.

October 31 — Federal unemployment tax
Deposit the tax owed through September if more than $500.

October 31 — Social security, Medicare, and withheld income tax.
File Form 941 for the third quarter of 2019. Deposit or pay any undeposited tax under the accuracy of deposit rules .If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter timely, properly, and in full, you have until November 10 to file the return.

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