Being a member of the US Armed Forces can make a variety of unique challenges to your financial and family life. You can serve abroad for extended periods of time, travel for training and travel frequently. You can also hire special expenses such as the cost and maintenance of military uniforms.
special arrangements Fortunately, the IRS has designed for service members to help alleviate some of the headaches that can arise from these challenges.
Here is a look at the most common ways being a military man or woman can affect your taxes and liabilities to the IRS
1. not all income is taxable.
If you receive combat pay, you should not include it as taxable income. Similarly, you should not pay taxes on compensation received for living expenses and family, uniforms, spending deaths, displacement and travel expenses, group term life insurance and training professional.
However, you will pay income tax on the basis of compensation, such as paying for training and active duty service, bonuses and incentive money and repayment of student loans for specific programs .
2. Travel and accommodation costs are deductible
If you travel more than 100 miles and spend the night as a member of the National Guard or armed Forces reservist, you can take a tax deduction -. same if you do not itemize.
IRS allows you to deduct the amount you spend for travel and accommodation related to work, more than 50 percent of the cost of your meals. But be sure not to deduct more for the cost of food and accommodation for the federal daily rate for accommodation and meals allows.
3. military uniform costs may be deductible.
If you buy uniforms that are not suitable to wear when you're off, you can deduct the cost of buying with your miscellaneous itemized deductions. Any uniform cleaning and maintenance is also tax deductible.
However, unless the amount withheld is significant or if you included additional itemized deductions, you can not receive a tax benefit for that expense. You can only deduct the amount of the load, if included with other miscellaneous itemized deductions exceed 2 percent of your adjusted gross income.
4. The tax relief is provided for additional moving expenses.
Although the military pays for basic expenses, it is not uncommon to hire some moving expenses that are not covered. In this case, you can deduct unreimbursed on your tax return moving expenses without having to meet the distance requirements or time limits which are the standard for moving expenses deduction.
additional moving expenses are deducted as adjustments to income. You do not have to itemize to take advantage of this tax break.
5. You can keep your home state of residence.
Change State of residence if you often move can be a huge pain. Not only is it complicated to produce tax returns for multiple states, but you may end up paying more state taxes in one state against another.
Fortunately, if you move you, for military reasons, you can keep the residence in your home state. If you have a spouse, this directive applies to them too.
If at any time you live in a state that collects income tax, but keep the residence of the state in a state that has not, in general the new State can 't do apply the income tax.
again, if your employer in the new state will withhold income tax from your pay, you can file a nonresident return to that state to receive a refund.
6. More time to file your return is available.
The additional time to file your tax return may be allowed if you are stationed overseas or are in a combat zone during tax filing season.
when serving overseas, you automatically have more time to file your tax return without having to request an extension. But this extension is only until June 15. If you need more time, make sure to request an extension that gives you until October 15 to submit your return.
If you serve in a combat zone, the IRS gives you more time to file your taxes. You have 180 days from the date of your return from the combat zone or your last date continues hospitalization for injuries received while serving in a combat zone to file your return.
The 180 days are in addition to the number of days you were allowed to settle in when you entered the combat zone. And without interest or penalties will be your responsibility during this extension.
Keep in mind while extensions give you more time to file, any tax you owe must be paid by the regular due date of the return.
7. Some military members are eligible for tax breaks for death.
If the survivors of a service member who died during active service receive a death gratuity of $ 100,000, this amount is
tax free.Furthermore, if a service member dies while serving in a combat zone or in support of combat operations, the tax liabilities of the service member to the IRS are forgiven. This includes tax for the year of death, and potentially all previous years.
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