January is here, which means the holidays are over and you should be thinking about taxes. Whether you plan to do your taxes yourself or take them in for an accountant to handle, you need to think about getting ready to do them.
Taxpayers have until Monday, April 18, 2016, to file their 2015 tax returns.
Here is a list of 5 things that military families need to know about filing federal and state income taxes. Make sure to go over these and apply them to your situation.
Free Tax Assistance On Post Most military installations will offer free tax filing assistance through the on-post tax center. This can be very helpful because you can make an appointment to get your taxes done and have someone with experience do them for you for free. A lot of military members take advantage of this service. Check and see what is available at your duty station. You probably do have to make an appointment ahead of time.
Free Tax Online Programs If you want to do your taxes online using a tax program you should learn about the free options for service members.
H&R Block at Home, TaxAct, TaxSlayer and TurboTax offer free tax preparation software for your federal taxes.
Keep in mind that in most cases you will have to pay for the state part of your return. That will depend on which state you are filing with and you should figure out what the fees will be for your particular state. Some states do not have an income tax and others do not tax members of the military.
Tax-Exempt Income When you are serving in the military, not all of your income is taxable. You do not have to pay taxes on combat pay. This is important to remember, especially if you were deployed for the whole calendar year.
BAH, BAS, uniform allowances, moving and travel pay and educational payments are also not taxable. This means that the amount that you make that you have to pay taxes on is a lot lower than what you brought in. Luckily, any tax program you use is going to know how to get you the best refund when you are dealing with combat pay and other extra military expenses that are not taxable.
One thing to remember is that in order to qualify for the EITC (Earned Income Tax Credit) you have to have a minimum of a certain amount of taxable income.
Military Deductions There are a few tax deductions that service members need to know about. You can deduct some of your uniform expenses, some of the job and travel expenses you may have had when getting out of the military as well as travel of more than 100 miles if you are a part of the Reserves.
Extension of Time to File Taxes If you have served in a combat zone or outside of the United States, then you should be able to extend the time you need to complete your taxes to October 15. This can come in handy for a lot of people serving and makes their lives a little easier.
And finally, new to 2016, active duty, Guard, Reserve and retirees will need their proof of health care coverage (IRS Form 1095) when filing their federal tax returns for 2015 as part of the federal Affordable Care Act. The Defense Finance and Accounting Service will be providing this information to members of the military. This form will also be available online through your myPay account. Look for it in the taxes section.
As a member of the military, you don’t want to miss out on these tax breaks and benefits that you are entitled to. They can help you keep more money at tax time and they are the reason a lot of military families receive a tax return each year.
Find a place to get your taxes done that you can feel comfortable with and be aware of what you can do to make filing taxes a little easier on yourself.
