Members of the military and their families are often eligible for certain
tax breaks. For example, members of the armed forces don’t have to pay taxes on
some types of income. Special rules could also lower the tax they owe or give
them more time to file and pay taxes.
No matter what time of the year, it’s good for members of the military and
their spouses to familiarize themselves with these benefits. Here are some
things for these taxpayers to know about their taxes:- Combat pay exclusion. If someone serves in a
combat
zone, part or even all of their combat pay is tax-free. This also
applies to people working in an area outside a combat zone when the
Department of Defense certifies that area is in direct support of military
operations in a combat zone. There are limits to this exclusion for
commissioned officers.
- Deadline extensions. Some members of the
military, such as those who serve in a combat zone, can postpone most tax
deadlines. Those who qualify can get automatic extensions
of time to file and pay their taxes.
- Earned income tax credit. If those serving get
nontaxable combat pay, they may choose to include it in their taxable
income to increase the amount of EITC. That means they could owe less tax
or get a larger refund.
- Signing joint returns. Normally, both spouses
must sign a joint income tax return. If military service prevents that,
one spouse may be able to sign for the other or get a power of attorney.
