10 Tips for Filing Military Taxes

There are a lot of resources out there to help military members and their families maximize their tax refunds.
There are a lot of resources out there to help military members and their families maximize their tax refunds.

Taxes are difficult enough for civilians. But if you're a member of the armed services or in a military household, the dreaded chore of filing income taxes can seem even more complicated.

First, you have to sort out whether what you earned over the past year is even taxable. Some military compensation is not. That's generally a good thing, but there are circumstances when having a greater share of taxable earnings can result in a bigger tax refund. If you moved during the past year, you might not be sure where to file or whether you can deduct things like movers and travel costs. And just what makes a uniform deductible, anyway?

Ideally, members of the United States military wouldn't have to pay taxes. But even heroes can't escape income taxes — although enlisted soldiers or warrant officers serving in certain combat zones do earn federal tax-free income. For the rest of our service members and their families, there are other ways to reduce what you pay and maximize your refund.

10: Where Do I File?

In determining where to file, it helps to know two terms: home of record (your permanent address) and state of legal residency (SLR), which is the state where your permanent address is located. If you lived at your home of record or in your SLR in the past year, the answer is easy: File as you typically would.

If you're on active duty and stationed in the United States, you should file federal tax returns according to where you're stationed, not your home of record.

If you're on active duty outside of the U.S., you're still considered to be living in the U.S. for tax purposes. Those stationed overseas who have an army post office (APO) or fleet post office (FPO) address should send federal returns to the following address:

Internal Revenue Service Center

Philadelphia, PA 19255-0215

State returns are slightly different. Generally, anyone on active duty should file state taxes in his or her SLR. But whether you also have to file state taxes in the state where you're stationed depends on the state. Each has different laws determining whether you have to file in your state of residence while you're serving in another part of the country or globe. To find more information on your state taxes, visit this list of state tax information.

Keep in mind that if you have any non-military income from a second job or freelance work, you'll have to pay taxes on that income in the state where it was earned. So even if you don't have to file taxes on your military income, you'll have nonresident taxes on nonmilitary income [source: Intuit].

If your permanent address changes, let the IRS know by mailing form 8822 to the service center for your last permanent address. That information is included on the form.

9: When Do I File?

The tax filing date for military personnel is generally the same as everyone else's. For 2014 taxes, for instance, you must file on or before April 15, 2015.

However, there's a special deadline for certain members of the military. If you're stationed outside the United States, you get an extension. In fact, you get two extra months to file without even asking. Military personnel living overseas have until June 15 to submit income tax returns.

Regardless of where you're stationed, anyone can get a bit more time to file. Simply ask for an extension using form 4868, which can be filed electronically or through snail mail. File for an extension on or before your initial tax deadline of April 15 or June 15, and you get an extra few months to get your paperwork together.

Keep in mind, however, that you must pay some or all of the taxes you owe by the initial deadline or at the time you file the extension. Payments can be made electronically, by mail or over the phone [source: IRS].