U.S. military service members who are stationed in combat zones face extreme challenges each day. They risk their lives to serve their country. Itโs reasonable to expect that filing their taxes may be the furthest thing from their minds.
The IRS has decided that such brave men and women deserve more leeway than the rest of the population when it comes to taxes. In todayโs post, we discuss the special exceptions for military members in combat zones.
Built-in deadline extensions
In a previous post, we explained that if you need extra time to file your tax return, you need to request an extension. However, for military personnel serving in combat zones, this 180-day extension is automaticโand it applies to filing your tax return, claiming your refund or paying any taxes you owe. You also get the same extension for making contributions to your IRA.
Not all income is taxable
As a member of the armed forces, you have the option to exclude combat pay from your taxable income. However, sometimes including combat pay proves beneficial to your Earned Income Tax Creditโwhich can positively impact your bottom line. It can be useful to calculate your taxes both with and without combat pay to determine which option is best for you.
In addition, if youโre a currently enlisted member, warrant officer or commissioned warrant officer, you can omit other types of pay from your income tax returnsโincluding reenlistment bonuses or any pay you received for selling back your leave while in a combat zone.
The laws surrounding taxes for military members are complex. If youโre serving in the military, it can be worthwhile to have an experienced tax attorney prepare your tax return for youโto make sure youโre getting the highest tax breaks possible.