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What are Some of the Major Tax Benefits for Members of the Military?

by Brett Backues on July 14, 2016
You’ve given so much to your country by serving in the military. It’s only fair that you earn a few breaks on your taxes. Members of the U.S. military can receive a number of tax advantages as compensation for their service. These benefits can help soldiers save substantial amounts of money by claiming certain deductions during tax season. Talk to an accountant at MyCFOLink to find out more about how the deductions listed below apply to your division and rank.
Combat soldiers don’t pay taxes. For any month you’re in a field of combat, none of your income is taxable. Additionally, if you contribute this extra income to a Roth IRA, you won’t owe anything when you withdraw the money. Combat soldiers aren’t required to put this money into the IRA until at least 180 days after they return from service. The IRS understands that a tax return is the last thing on your mind when you’re serving in a combat zone.
Education for career enhancement is covered. If you take a college course or work towards a degree applicable to your job position, then you can file those expenses as a deduction. As long as your education is centered around improving your current job skills, this tax break is applicable.
Receive deductions and exemptions for moving or selling a house. Military service members relocate often. The whole process of packing up belongings and finding a new home is tedious and costly. That’s why the IRS allows military members to receive deductions for travel expenses (air, train, or car), shipment of household goods, and temporary lodging.
Get reimbursement for office and storage space in your home. If a certain portion of your home is dedicated to keeping up with the demands of a military job, that space may be qualified for tax deduction. For example, if your home is 2500 square feet and the storage or office area is 100 square feet, that’s 4 percent of mortgage or rent payment that could be eligible for reimbursement.

A variety of other perks and benefits affect members of the military during tax season, from discounts on trade publications to coverage of personal debts. To find out more about how your military service could save you money during tax season, call an Issaquah accountant at MyCFOLink now! 425.747.5355.