How to File Your Taxes When You’re Deployed

Deployed service members are expected to file their taxes. Fortunately, the Internal Revenue Service realizes service members and their families face unique circumstances and offers tools – and some special extensions – to make tax filing easier. Military OneSource also provides a suite of free tax services for eligible service members and their families.

Getting help filing taxes, getting an extension

In addition to serving in a combat zone, there are other ways service members can obtain an extension on filing taxes beyond the July 15 deadline.

Other tax assistance for service members and their families can be obtained through:

  • The IRS has a web page on tax information for military members who serve in the U.S. Armed Forces and uniform services.
  • The Volunteer Income Tax Assistance program. Offered for free by the IRS, this program is for those living on or off the installation and includes sites for military members overseas. VITA staff can help you with military tax issues.
  • Military OneSource MilTax free tax filing services. MilTax preparation and e-filing software, available Jan. 22 through Oct. 15, allows you to prepare and file your federal and state taxes with ease. It’s designed to address military-specific scenarios, such as those described above.

Getting started on free military tax filing

If you are a service member or filing taxes on behalf of a service member, keep the following in mind when getting started on your taxes:

  • Make sure you have a power of attorney in place if someone is filing on your behalf. If your spouse or someone else is filing your tax return, make sure they have all your information and attach the power of attorney – a legal document that provides them authority to make financial decisions in your absence. The person filing your taxes on your behalf will need to attach IRS Form 2848 with the tax return.
  • Get your statement online: You can go to myPay to get your military W-2 form. It is posted there before being mailed to you. You’ll need your Common Access Card or personal identification number to access it.
  • File the return in your permanent state. If you are stationed away from your permanent home address, you will still pay taxes in your home state in most cases. Note: military spouses who work and live with their service member in a state other than their home state as a result of military orders may not have to pay income tax in the state where they work.
  • Gather other important information. Other documents you may need to file your taxes include 1099 forms, deduction and credit information, receipts for child-care expenses, last year’s tax return, and any documents for investments, rental properties or mortgages. You’ll also need your military ID and every family member’s Social Security number, bank account and routing numbers if you are filing electronically, and receipts for charitable donations.

Deadline extensions for combat zone and hazardous duty

Filing your taxes after the July 15 deadline is more common than you think. This is especially true for service members who are deployed. The IRS extends filing deadlines – and paying of your income taxes – for service members who are:

  • Serving in a combat zone or directly supporting those in a combat zone, serving in a contingency operation, or having a “missing” status. Your tax extension generally starts the day you begin serving in the combat zone for the period of your service plus 180 days afterward. The spouse and family members of those serving in combat zone or contingency operation sometimes also qualify. Your command will notify the Internal Revenue Service of your deployment, so you can receive an automatic federal tax return extension. You may still want to write “COMBAT ZONE” in red on top of your tax return when you do file.
  • Hospitalized outside the United States because of injuries suffered in a combat zone or hazardous duty area. This applies for the period the service member is continuously hospitalized outside of the United States as a result of injuries sustained while serving in a combat zone, including 180 days thereafter. For hospitalization inside the United States, the extension period cannot be more than five years.

Preparing and filing taxes is a citizen and service member duty. But as a member of the military family, you can obtain 100% free access to tax consultants and financial counselors with military expertise.

Helpful Tips For Doing Military Taxes

There are many tax provisions that military members and their families can take advantage of.  Here are some top tax tips to consider before filing taxes:

Free Tax Filing Services and Consultants

Military members and their families can get help at many installations through the Voluntary Income Tax Assistance program (VITA). The legal center on base should be able to confirm if this service is available at the installation.  Additionally, through H&R Block and Military One Source free tax filing is available.

Tax Filing & Deadlines

The IRS extends many options for military members and their families if a soldier is overseas and in a combat zone. For example, the deadline for filing a return is automatically extended if a soldier is in a combat zone or has a qualifying service outside of a combat zone.

Gross Income Exclusion & Deductions

Service members receive many types of pay and allowances. The Internal Revenue Service requires that some of these be included in the gross income calculation while others are excluded from a soldier’s gross income. The following are excluded items from gross income according to the IRS:

Living Allowances

BAH (Basic Allowance for Housing), BAS (Basic Allowance for Subsistence), Housing and cost-of-living allowances overseas and OHA (Overseas Housing Allowance) compensation are excluded from gross income according to the IRS.

Moving Expenses

Traveling from one workplace to another or overnight travel is excluded. Traveling to and from work is not.  Benefits received for dislocation, military base realignment, and closure can also be excluded. Other types of moving expenses that can be deducted or excluded depending if the expense was a benefit or out-of-pocket un-reimbursed cost include move-in housing, moving household and personal items, moving trailers or mobile homes, storage, temporary lodging, and temporary lodging expenses.

Combat Zone Exclusion

The Combat Zone Tax Exclusion allows service members to exclude certain pay from gross income if they are in a combat zone. Typically the pay must be earned in a month that a service member served in a combat zone.

Types of pay include:

  • State bonus pay for service in a combat zone
  • Pay received for duties as a member of the Armed Forces in clubs, messes, post and station theaters, and other non-appropriated fund activities.
  • Active duty pay earned in any month served in a combat zone
  • Imminent danger/hostile fire pay
  • Reenlistment bonus
  • Awards for suggestions, inventions, or scientific achievements.
  • Student loan repayments
  • Pay for accrued leave

Miscellaneous Pay Allowances

There are variety of pay allowances that IRS excludes from income including defense counseling, disability, group term life insurance, professional education, ROTC educational and subsistence allowances, survivor and retirement protection plan premiums.

Family Allowances

Military family dependents are extended some exclusions from gross income as well including certain educational expenses for dependents, emergencies, evacuation to a place of safety, and separation.

IRS Military Tax Tips Video

The IRS addresses many tax provisions for military members and their families in this short video including:

  • Filing taxes and postponing for members of the military who are on duty overseas
  • Military uniform deductions
  • Out-of-pockets travel expenses
  • Tax deadlines
  • Military specific tax deductions
  • Travel expenses

Death gratuity

Any death gratuity paid to a survivor is excluded from gross income.  Un-reimbursed dependent travel and burial services are also deductible.

In-kind Military Benefits

The military provides many in-kind benefits, some of which do not need to be included as gross income, such as:

  • Space-available travel on government aircraft
  • Legal assistance
  • Dependent-care assistance program
  • Commissary/exchange discounts
  • Medical/dental care