If you are a member of America’s armed forces, we know how valuable your time is – even when it comes to tax season. That’s why we have compiled a few tips for you to know as you begin the process of paying Uncle Sam.
You don’t need to be an expert in state and federal tax code, and you don’t need to spend the money on an accountant or go to a retail tax service. You just need your basic tax forms, and TurboTax can do the rest for you.
What Service Members Need to Know When Filing Taxes
Organization is Your Friend
Keep all you tax documents organized into one file, and never leave them separate. There’s a reason why the military taught you a high standard of order, and preparing your taxes is made much easier when you keep these documents together and separate from your other files. You will save time, and that means a faster tax refund.
Take Advantage of Your Deductions and Credits
As a service member, there are many deductions which you can take advantage. Many are the same the civilians can file, but you also get many other benefits thanks to the uniform you are wearing. Here are just a few of the deductions and credits you can claim:
You Get to Keep Your Combat Pay
By including it on your taxes as you determine your earned credits, you remove the danger of reporting no earned income, and that means that you can still qualify for the Earned Income Tax Credit. Just remember that you can only report all or none of your combat pay – there is nothing in between.
For service members serving in a combat zone, all the money you earn is non-taxable. No we did not stutter! Every single penny designated as combat pay is considered exempt under federal law, so you don’t even have to claim it on your taxes. However, if combat pay was all that you earned for the year, there could be an advantage in reporting it.
Earned Income Tax Credit
Let’s face it, while there are tons of benefits being in the military, pay is not one of them. However, you are not doing this for the money. As a result, you can qualify for the Earned Income Tax Credit which can be a nice boost on your tax return.
Moving and Travel Expenses
Moving from one base to another can be a costly affair, but the good news is that you can take advantage of these costs. Unreimbursed expenses are tax deductible so long as they are defined as reasonable by the government. If you are married and have to move the family along with you, you may qualify to have almost 95% of the cost of moving reimbursed.
Child Tax and Child/Dependent Care Credit
If you have children, this credit can definitely be a big help in getting you a bigger return on your taxes. Up to $6,000 dollars if you qualify for this credit.
You Get an Automatic Deadline Extension if You’re on Combat Deployment
As a member of the armed forces, you also get a 180-day extension on filing for your taxes. This benefit extends to your spouse as well if the two of you file jointly. However, it only applies if you are serving in a combat zone, and it begins the moment you return from such a deployment.
No Need to Report Health Insurance
If you are getting your health insurance from the military, there’s no need to file any forms such as the 1095-B or C as required by the Affordable Care Act. You might receive them in the mail, but unlike civilians who must report their insurance coverage, these forms are not required for you to report on your taxes. Just keep them for your records.
Use TurboTax for the Most Accurate Filing and Maximize Your Return
Using TurboTax will save you big when it comes to time, and time is a valuable resource in the military. All you need to do is have your tax documentation organized and ready. TurboTax will do the rest.
TurboTax Offers Free Tax Filing
Military personnel, ranks E-1 to E-5, are eligible to file taxes for free using the Turbo Tax Online Federal Free Edition. It asks you simple questions to help you get the right information filed and offers you a huge library of resources that are online in order for you to be as accurate as possible in reporting your income and receiving the tax deductions you deserve.
They even have a free tax refund calculator available that allows you to know the amount of money that you will be getting back in your tax refund. Their online filing services has the ability to import your W2 information into your tax return so you can avoid worrying about your forms being delivered via snail mail.