military taxes

Military Savings for Tax Time

02/03/2017 By Michelle Volkmann

Military couples don’t have to spend money on tax preparation software. There are plenty of free and discounted options available for service members, military spouses and retirees.

Here is a list of military savings for tax time.

Volunteer Income Tax Assistance (VITA) Program

Have you heard of the Volunteer Income Tax Assistance (VITA) Program? This program operates free tax preparation centers at military installations around the world. The VITA offices are open to active duty service members, including National Guard and Reserves, military dependents and retirees.

Since the Armed Forces Tax Council partners with the IRS for this program, volunteers received IRS certified training. They are ready to help military families with tax preparation and answer common tax questions at these centers.

VITA is a great option for young service members who need help filing their taxes.

If you are planning to e-file your taxes at a VITA office, bring the following documents to your appointment:

Valid photo identification
Social Security cards for you, your spouse and dependents.
Birth dates for you, your spouse and dependents
Your wage and earning forms, such as Forms W-2, W-2G, and 1099-R.
Interest and dividend statements (Forms 1099).
A copy of your last year’s federal and state tax returns, if available.
Routing and account numbers for direct deposit of your tax refund.
Total amount you paid for day care and the day care provider’s identifying number. This is usually an Employer Identification Number or Social Security number.
Other relevant information about your income and expenses.

If you are married and filing a joint return, both of you need to sign the return.

What if my service member is on deployment?

If your service member is on deployment, you have a few options. If there’s a VITA site at their location, they can e-file their taxes there.

If you, as the military spouse, plan to file a joint return, bring a valid power of attorney when doing your taxes. The IRS recommends using Form 2848, Power of Attorney and Declaration of Representative when completing your taxes.

If your service member is in a combat zone, the military spouse can file a joint return with “a signed statement explaining that the other spouse is in a combat zone and unable to sign,” according to the IRS.

Click here to see the list of Volunteer Income Tax Assistance offices around the world.

“MilTax” Software Available Through Military OneSource

If you feel confident that you can complete your taxes online, consider e-filing using Military OneSource’s free filing service, MilTax. This service allows military members to complete and electronically file federal and up to 3 state tax returns, according to Military OneSource.

If you have questions about this tax service or about your own tax returns, please call 1-800-342-9647 and ask to speak with a Military OneSource tax counselor. Trained tax counselors are available 7 days a week from 7 a.m. to 11 p.m., EST. For online assistance with questions about deductions, exemptions and filing deadlines, send inquiries to TaxQuestions@militaryonesource.com.

This service is available to active duty, National Guard and Reserve, and spouses. Users must create a free account with Military OneService before taking advantage of this military savings.

TurboTax Military Edition Software

Active duty and reservists, who are USAA members, can get TurboTax Deluxe Online Federal for free. All USAA members can save up to $20 on TurboTax federal products.

Visit USAA’s website for more information the TurboTax Military Edition Software.

Did we miss any other tax preparation services that offer military savings? Tell us about it in the comments section.

Service Members: Filing Their Taxes

01/27/2016 By Julie Provost

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.

5 Things Military Service Members Need to Know About Filing Their Federal and State Taxes

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.

What questions do you have about filing taxes?

How to Spend Your Tax Refund Wisely

02/12/2015 By Kimber Green

It’s that wonderful time of year: tax season.

I’m always such a procrastinator when it comes to taxes. I don’t wait until the last minute, but I put it off as long as I can. The first time my husband and I filed taxes together he insisted on going to a tax preparation business out in town. I’ve always done my own taxes so I was quite mad when we finished up and I saw our bill. I’m still annoyed by it so I continue to procrastinate every year.

My husband is adamant that we use a tax preparation company since they offer a guarantee that if something is wrong, they will fix it. Having special military pay and working in tax-free zones for part of the year can all add up to some tax confusion so having the comfort of knowing a professional is doing the paperwork is a bit of a relief.

Recently I discovered that H&R Block has offices on more than 100 military bases offering free tax services. You have options for filing your taxes for free too. The Volunteer Income Tax Assistance Program offers “no-cost tax advice and preparation, return filing and other tax assistance to military members and their families” and through Military OneSource, you can use H&R Block At Home Online Tax Return Preparation. If you want help, you can go in person or call their help line 24/7 until June or if you want to do it yourself at home you can too. You don’t need to spend money to file your taxes.

However you choose to file your taxes, you have to do it before April 15. Hopefully you’ll be receiving a refund. We can all hope.

Once you file your taxes you still have one big decision left to make, what are you going to do with your tax refund?

There are 5 options of how to wisely reinvent your tax return.

Pay off credit card debt: Take this opportunity to pay off, or at least lower, your credit card debt. If you have student loans, vehicle payments or mortgage payments, you could put your return toward that as well.

Invest in your future: Financial planning, while not very exciting, is important. Meet with a financial adviser and see what types of investments are right for you. Perhaps it’s time to start a Roth IRA if you don’t already have one.

Invest in your children’s future: If you have children and hope they will go to college one day, setting up a college fund now can help offset tuition and other expenses down the road.

Buy a new vehicle: Have you been dreaming of a new car? Your tax refund might give you the additional income desired to put down a significant down payment.

Take a vacation: Everyone needs a little down time. Take some much needed time with your family, or just yourself and get away for a while. While you are vacationing, don’t forget to ask for a military discount at hotels, museums, attractions and restaurants. You can also book a vacation at a military resort if you want to stretch your tax refund dollars a little farther.

No matter how you choose to use your tax refund, do something that will make you happy. While your neighbor is showing off his new shiny car, you might be smiling having invested in your children’s 529 college savings program. It might not be flashy, but it will have a great reward one day when your children head off to college.