Everything Military Families Need to Know About Filing Taxes

February 06, 2018

Gross income, combat pay exclusions, employee business deductions, child tax credits, first-time homebuyer credit repayment...is your head spinning yet? The tax season is a doozy for any citizen, but military taxes and considerations are a beast of their own. Your income sources may have changed over the year, you may have had to relocate, or you might have grown your family. All of these changes, and many more, will impact how you file 2017 taxes.

Tax Forms on American Flag

Let’s look at some things to consider when filing your military taxes.

Resources

When filing your military taxes, you may have a lot of questions. Luckily, the government has some comprehensive resources to address many of the tax filing questions service members and their families have. Here, you will find tax information for members of the US Armed Forces, provided by the IRS. This resource explains the tax laws affecting the military, including the first-time homebuyer credit and information on stimulus payments.

There is also a page dedicated to current military personnel, combat service members, former military personnel, and disabled veterans here.

Common Exemptions

Military members and their families may be able to deduct some expenses from this year’s tax return. The list varies depending on your situation, but below are some common exemptions or deductions:

CPA Helping with Military Tax Filing

Taxes for military families aren’t one-size-fits-all, so your specific exemptions and deductions will depend on your tax situation. Always consult with a tax professional or CPA for guidance.

Paperwork Needed

Gathering all necessary paperwork is often the hardest part of tax season! If you or your spouse is in the military, you are no stranger to the many paperwork hoops to jump through. Below is a short list of the documents you will need to file your 2017 military taxes:

  • W2s, obtained from the Defense Finance and Accounting Service (can also view online)
  • 1099s, if needed
  • Military ID
  • Social Security numbers
  • Deduction and credit information
  • Bank account and routing information (to receive your refund through direct deposit)
  • Last year’s tax return
  • Any documents for investments, rental properties, or mortgages

This isn’t a comprehensive list, but it’s a start.

Organized Paperwork for 2017 Military Taxes

Military Tax Filing

The good news is that in recent years, military tax filing has gotten much easier. Military One Source has teamed up with tax professionals to offer MilTax, an online tax preparation and e-filing platform. H&R Block offers free federal and state online filing, and also has a military tax information center. TurboTax has released a military discount on their filing software for E1-E6 ranks. Or, you can always file your taxes the old fashioned way, through the mail! The IRS explains how to file.

This year, the deadline to file (without any extensions) is Tuesday, April 17th. To learn more about military taxes and considerations, check out this 2016 article from The Tax Adviser.

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