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Tax benefits for military members in combat zones

On Behalf of | Sep 26, 2018 | Tax Law |

U.S. military service members who are stationed in combat zones face extreme challenges each day. They risk their lives to serve their country. It’s 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 today’s 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 automatic—and 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 Credit—which 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 you’re a currently enlisted member, warrant officer or commissioned warrant officer, you can omit other types of pay from your income tax returns—including 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 you’re serving in the military, it can be worthwhile to have an experienced tax attorney prepare your tax return for you—to make sure you’re getting the highest tax breaks possible.

We insist that your taxpayer rights are protected and your options are known.

Our services are confidential and are protected under the attorney-client privilege as allowed by law.