Military
Tax Relief: Everything to Know About It
Serving in the
army is one of the most honorable and difficult things that one can do for
their country. While nothing can make up for what this means and the losses it
can cause, you should know that, as a taxpayer, you can benefit from certain
military tax relief programs offered by the government.
It’s important to
mention that in order to be eligible for these programs you must be currently
active in or retired from the Army, Navy, Marine Corps, Air Force, Coast Guard,
Space Force, the military reserve, or the National Guard. Some of the benefits
that they can bring include postponement of deadlines, payments that are
partially or totally tax-free, deductions, and many others. In this article, we
will be discussing military tax relief programs and what you should know if you
want to apply for one or more of these programs.
How Does Military
Tax Relief Work?
Combat pay is
not taxable
Firstly, you should know that combat pay
is not taxable and doesn’t count as income. So, you have no obligation to
include it as such. However, in case you want to apply for the Earned Income
Tax Credit, a good idea would be to include it. By doing this, you can avoid
reporting no income and possibly not qualifying for an EITC. Also, you are not
allowed to include only a portion of your combat pay. It’s either the total
amount or none of it.
As an enlisted member, commissioned
warrant officer, or warrant officer, you can also exclude some other things
from your taxable income. Some of those include student loan repayments, reenlistment
bonuses, and accrued leave pay.
Filing
deadlines are extended for those active in combat zones
If you are a member of the military who
is serving in an active combat zone, the IRS offers you 180 extra days for all
tax duties including filing and paying. This may not be a military tax relief
solution but it’s definitely helpful when it comes to your tax-related
activity.
The interest
rate is capped at 6%
As a member of the military, the maximum
interest rate on any owed amount cannot be over 6%. However, this only applies to
the interest charged while you are active in the military and if your service
affects your payment ability.
Death
benefits are not taxable
As a survivor of an armed forces member,
you will receive a $100,000 gratuity that is not taxable. If you are a survivor
of a retiree military member whose death was caused by service, you will also
get this benefit within 120 days of their retirement.
Tax
liabilities are forgiven in case of death
A military member who dies in a combat
zone will be forgiven all tax liabilities they may have owed to the IRS. In
case that tax was already paid, the survivors will get a full refund.
Deductible
moving and travel expenses
A reservist who travels over one hundred
miles because of their service can have these expenses fully deduced. Also, as
an active military member, you can have all of your moving expenses deduced in
case you need to change your location because of your service.
Other
military-related deductions
There are other military-related
deductions that you can enjoy as part of military tax relief from the
government. For example, the cost and maintenance of your uniform, which you
cannot wear while off duty, can be deduced. Also, certain job-related expenses
can be deduced if you have chosen to leave military life and pursue another
career.
Additional
Features to Consider
There are some other important things to
consider as part of the military tax relief that the government offers. For
example, in the case of disabled veterans, if they benefit from a disability
percentage increase from the Department of Veteran Affairs, they can get a tax
refund. The same goes for a veteran who has been disabled during combat and
benefits from Combat-Related Special Compensation.
Some programs have to do with dependent
care assistance too. They are meant to help the veteran or their family pay for
care and are not part of the military member’s taxable income. The same goes
for certain education benefits that a military member or a veteran enjoys.
These are not taxable either.
How We Can
Help You Decide
Choosing the right option out of all of
the above in case you are serving or have served in the military can be an
overwhelming process. Thankfully, our website is meant as a way for you to pick
the right tax relief company and get rid of the stress of doing it all
yourself. We have extensive reviews and truthful ratings for all the best tax
relief firms in the country. This way, it should be a lot easier for you to
start getting interested in military tax relief and enjoy all the benefits that
you are eligible for. Just compare these firms, look at what they offer, and
establish which one could be a good fit for your situation.
Apart from that, our website also offers
a large number of educational resources in the form of articles that will offer
you important pieces of information on tax relief. Everything you need to know
is one click away for you to discover and research. The website is
user-friendly, offers clear and verified information, and was created as a way
to provide information to people seeking tax relief advice.
Bottom Line
To sum it all up, military tax relief is
just as important as any other type of tax relief program. Active or former
military members deserve all of these benefits because these people are usually
busy defending their country in various ways. If you are or have been part of
the military, you must stay up-to-date on this topic so you can grasp all
opportunities that you could possibly enjoy when it comes to military tax
relief. After all, paying your taxes should be one of your last worries when
you are in an active war zone trying to defend your country and save your life.
