How Military Taxes Work


Filing and Payment Deadlines for Military Taxes

When it comes time to actually send in all that paperwork and the tax payment due, for members of the military, location is everything.

First, where to file. For soldiers with domestic permanent-duty stations (in the United States or Puerto Rico), taxes go to the processing center associated with those stations, not the soldiers' home states. If they're stationed overseas, they send forms and payment to the IRS processing center in Austin, Texas [source: Bell].

Next, deadlines – and these can vary considerably.

Military personnel stationed domestically face the same deadlines and extension processes as civilians. Tax forms and payment are due by April 15, and they can request a six-month extension using form 4868 [source: Bell]. Those stationed overseas but not in a combat zone receive an automatic two-month extension; beyond that, it's form 4868 [source: Bell].

As with civilians, though, these extensions only apply to paperwork, not payment. The IRS still expects to receive any tax due by April 15 [source: Bell].

All of this goes out the window when soldiers are in a combat zone (or an area designated as combat-zone support) or hospitalized due to service in a combat zone. They receive an automatic deadline extension of at least six months, and this extension applies not only to paperwork but also to payment [source: Liberty Tax Service].

The IRS is typically aware of which taxpayers are stationed in combat zones; the organizations gets the necessary information from the military. If the IRS misses someone, though, military personnel can call the IRS, send an email to combatzone@irs.gov, or simply write "Combat Zone" and the deployment date at the top of their tax forms when they file [source: Bell].

If you're still not completely sure exactly when tax is due, what to exclude and when excluding income could end up costing you (join the rest of America), there are experts who can help both at home and abroad. Military personnel can get tax advice from their bases' finance offices, and often can have their returns prepared for free by the Armed Forces Tax Council or by IRS-trained volunteers [sources: IRS, Bell]. Some versions of tax preparation software are free to military personnel. Many U.S. embassies offer help during tax season, too, from January through June – though for soldiers who receive automatic six-month extensions due to combat, that may not be of much help [sources: Bell, TurboTax].

But then, if you're in a combat zone, don't worry about it. Taxes should be the last thing on your mind.

Author's Note: How Military Taxes Work

Clearly, this is not a comprehensive tax guide for military personnel. It's a review of some military-specific guidelines and quirks in the system affecting soldiers and their families. In deciding what exactly to address in this piece, I picked the issues that seemed most relevant, surprising and different from civilian taxpaying. For complete details on the tax code as it relates to military service, see Tax Information for Members of the Military from the IRS. It's remarkably easy reading, considering the source.

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Sources

  • Bankrate. "Determining taxable income." April 1, 2005. (Nov. 7, 2014) http://www.bankrate.com/finance/taxes/determining-taxable-income-1.aspx
  • Bell, Kay. "Earned income tax credit could pay off." Bankrate. Feb. 21, 2014. (Oct. 31, 2014) http://www.bankrate.com/finance/money-guides/earned-income-tax-credit-could-pay-off-1.aspx
  • Bell, Kay. "Tax Guidelines for the Military." Bankrate. Jan. 5, 2010. (Oct. 29, 2014) http://www.bankrate.com/finance/taxes/tax-guidelines-for-the-military-1.aspx
  • Ewing, Ethan. "Top Tax Tips for Military Personnel." Military.com. (Oct. 29, 2014) http://www.military.com/money/personal-finance/taxes/top-tax-tips-for-military-personnel.html
  • GlobalSecurity.org. "High-Altitude Airdrop Mission (HAAMS)." (Nov. 7. 2014) http://www.globalsecurity.org/military/ops/airborne-halo-haho.htm
  • Internal Revenue Service (IRS). "Armed Forces' Tax Guide." 2013. (Oct. 29, 2014) http://www.irs.gov/publications/p3/index.html
  • Internal Revenue Service (IRS). "Free Tax Help for Military Personnel and Their Families." March 13, 2013. (Nov. 7, 2014) http://www.irs.gov/uac/Newsroom/Free-Tax-Help-for-Military-Personnel-and-Families
  • Internal Revenue Service. "Topic 701: Sale of Your Home." Aug. 11, 2014. (Nov. 5, 2014) http://www.irs.gov/taxtopics/tc701.html
  • Liberty Tax Service. "Tax Guide for Military." (Oct. 29, 2014) http://www.libertytax.com/tax-resources/occupation/tax-guide-for-military/
  • Military.com. "State Tax Information." (Oct. 31, 2014) http://www.military.com/money/personal-finance/taxes/state-tax-information.html
  • TurboTax. "Filing State Income Taxes When You're in the Military." (Oct. 31, 2014) https://ttlc.intuit.com/questions/1901517-filing-state-income-taxes-when-you-re-in-the-military
  • TurboTax. "TurboTax Military Edition." (Nov. 7, 2014) https://turbotax.intuit.com/personal-taxes/online/military-edition.jsp

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