In the past, companies thanked military veterans with meals or discounts on Veterans Day and now, in part because of Social Media, we are all aware of free oil changes, meals, and even car rebates - some of which are good year round and not just on Veterans Day. Yet, not many people know that there are significant tax return benefits for troops as well. For some reason, these tax deductions, credits, and special benefits specifically available to our military don't seem to get the same hype as a free cheeseburger. This blog is dedicated to all the brave people that are serving or defend our constitution and our country from enemies both foreign and domestic - we honor you and thank you for your service.
To obtain the biggest refund you are due, it's important to become familiar with the deductions, credits, and benefits you are entitled to so you know how to maximize your tax situation. One of the most important IRS publications related to military service is the IRS Publication 3 - Armed Forces' Tax Guide. This guide is a great place to start as it contains a summary and overview of all of the tax considerations related to military service and what would be applicable to each service member. It outlines many individual tax considerations consisting of income inclusion or exclusion, implications of serving in a combat zone, special deductions available only to service members, tax credits and other deductions and other tax situations that are unique to military personnel.
The IRS web site has many resources, topics, and other publications regarding military service as well. Go to IRS.gov and search for "military," or go directly to http://www.irs.gov/Individuals/Military. There you will find greater help on topics and categories such as Special Earned Income Tax Credit or EITC rules, information for active military members, retired veterans' considerations, employers with employees in a combat zone, tax return extensions, and much more.
Obviously, there are so many different tax considerations and potential tax return benefits available to our military service taxpayers that one blog cannot cover them all. So many so that even a good tax preparer can miss an appropriate deduction or deserved credit, if they don't have all the information from the taxpayer. If you prepare your own taxes or use packaged software then awareness of the tax benefits that may apply to you is even more important. One of the best ways to avoid missing a deduction or credit is to gain a general understanding of the tax benefits that may apply to you. Having this information will help you gather the right paperwork, organize your records appropriately, and even help you ask the right questions of your tax preparer.
Participation in the service - defending the freedoms and safety of this country - is a very noble contribution and tax benefits are just a small token of thanks for your service.