May is National Military Appreciation Month, and the Internal Revenue Service wants members of the military and their families to know about the many tax benefits available to them.
Each year, the IRS publishes Publication 3, Armed Forces Tax Guide, a free booklet packed with valuable information and tips designed to help service members and their families take advantage of all tax benefits allowed by law. This year’s edition is posted on IRS.gov. Available tax benefits include:
- Combat pay is partly or fully tax-free.
- Reservists whose reserve-related duties take them more than 100 miles from home can deduct their unreimbursed travel expenses on Form 2106 or Form 2106-EZ, even if they don’t itemize their deductions.
- Eligible unreimbursed moving expenses are deductible on Form 3903.
- Low-and moderate-income service members often qualify for such family-friendly tax benefits as the Earned Income Tax Credit, and a special computation method is available for those who receive combat pay.
- Low-and moderate-income service members who contribute to an IRA or 401(k)-type retirement plan, such as the federal government’s Thrift Savings Plan, can often claim the saver’s credit, also known as the retirement savings contributions credit, onForm 8880.
- Service members stationed abroad have extra time, until June 15, to file a federal income tax return. Those serving in a combat zonehave even longer, typically until 180 days after they leave the combat zone.
- Service members may qualify to delay payment of income tax due before or during their period of service. See Publication 3 for details including how to request relief.