10 Tips for Filing Military Taxes

Military Tax Tips: Find More Help for Filing Your Taxes

Veterans qualify for a number of federal tax credits.
Veterans qualify for a number of federal tax credits.

2: What If I Am a Veteran?

If you're a veteran receiving disability benefits, you can exclude those earnings from your gross income. Disability benefits can include pension payments, dependent care and assistance, or grants to outfit your home or vehicle with special equipment that takes your disability into account [source: IRS].

Federal refunds are available to veterans whose disability amount has increased or who received special compensation for combat. This is a special circumstance, available only if the Department of Veterans Affairs has either granted or re-assessed your benefits. If that occurred in a previous year, you could file an amended tax return using form 1040X. Because of the complexity involved, it makes sense to seek professional advice if you think you might be eligible for this type of refund [source: IRS].

Regardless of disability, many veterans are also eligible for other types of federal tax credits, including the Earned Income Tax Credit. If you decide to go back to school or get involved in job training after the military, education credits can help cover the costs. And business owners who hire veterans can qualify for a credit known as the Work Opportunity Credit.

1: How Can I Get Help?

Military personnel can get free tax help through a government program called the Volunteer Income Tax Assistance program (VITA). Services include tax counseling, preparation of tax returns and electronic filing. The volunteers are vetted by the IRS, and the program operates in public centers across the country.

These services are available to disabled and elderly Americans too. Many military installations have VITA volunteers on base. To find a center near you, visit the IRS website or call 800-906-9887.

If you prefer to do it yourself, the IRS publishes a handy Armed Forces Tax Guide, also known as Publication 3 [source: IRS]. The booklet, which can be found online or downloaded as a PDF, includes example calculations and exercises to help you troubleshoot your own taxes.

While you can trust publications found on the IRS.gov website, be wary of email correspondence that claims to come from the IRS. Even military email addresses ending in .mil could be suspicious. As recently as 2012, the IRS became aware of a phishing scam targeting taxpayers getting income from Veteran's Affairs. The taxpayers were asked to send personal documents that were then used to commit identity theft [source: IRS].

If you receive any type of email requesting personal information, verify the source before responding. Check with the IRS's list of suspicious emails to stay on the lookout for common scams.

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