This post is the first in a three-part series covering tax tips and tricks for military members.
Tax season is upon us once again. Smart Military Money is dedicated to helping our readers file their taxes successfully while taking advantage of any opportunities and discounts available to active military, veterans and military families.
Part one focuses on free tax filing services and provides a general overview of the many benefits of the Military Family Tax Relief Act of 2003.
Service members and their families are always first in line to sacrifice for our country. Many financial agencies offer free filing and other tax services to military members as a way to give back.
Through Military OneSource, service members and their families, including National Guard and Reserve members, can file their federal and up to three separate state tax returns online for free using H&R Block services.
Before you stray too far looking for a solid free filing service, check out the Volunteer Income Tax Assistance (VITA) program offered on many bases, even international locations. VITA offers tax advice, preparation and assistance with an expertise in military specific issues.
H&R Block also offers a scholarship to military spouses wanting to take their Income Tax Course. Whether you’re looking to continue in training and become a certified tax assistant or just learn more about the tax filing process to ensure you’re filing your own taxes correctly every year, this scholarship is a great learning experience.
If your search takes you elsewhere, be aware that some free tax filing services you come across only apply to those filing a 1040 EZ and won’t be available to those hoping to itemize their deductions.
Beyond filing, there are also a number of military-specific stipulations when it comes to calculating income and deductions that came as part of the Military Family Tax Relief Act of 2003.
For instance, if a deployment forced you to sell your primary residence and you sold for more than the purchase price, the capital gains tax on earnings will be relaxed. More generally, military homeowners spending time away due to a deployment or PCS are extended some leeway in the definition of a primary residence.
The bill also grants that many assistance programs offered to military families can't be included in taxable income. This includes homeowner’s assistance payments, military death benefits and dependent care assistance benefits.
For more information on this military tax benefits package, check out the highlights from the IRS and stay tuned for our next installment of Military Tax Tips & Tricks, which will include more information about military-specific deductions and credits. For a complete look at tax benefits available to veterans, The Simple Dollar has a guide to every benefit that can help you on your tax return.
VA loans allow Veterans to have a co-borrower on the loan. Here we break down co-borrower requirements and provide common scenarios around co-borrowing and joint VA loans.
Your Certificate of Eligibility (COE) verifies you meet the military service requirements for a VA loan. However, not everyone knows there are multiple ways to obtain your COE – some easier than others.