IRS offers tax benefits for military and veterans

Story by Diego Pérez Morales

• 1mo

Members of the U.S. Armed Forces, veterans, and their families are entitled to a range of special tax benefits that acknowledge their service and sacrifices. The IRS has tailored these benefits to accommodate both simple and complex tax situations, ensuring that those who serve our country can navigate tax season with greater ease. Among these benefits, combat pay stands out as a significant advantage, as it is partially or fully tax-free, providing substantial financial relief to those serving in combat zones or hazardous duty areas.

Another crucial benefit is the combat zone tax deadline extension, which grants additional time for qualifying military members to file and pay their taxes. This extension is particularly beneficial for those engaged in contingency operations outside the U.S., allowing them to focus on their duties without the added stress of immediate tax obligations. Additionally, armed forces dependency allotments, which are government-contributed assistance programs for dependent care, are excludable from income, further easing the financial burden on military families.

The Earned Income Tax Credit (EITC) is another valuable benefit for low and moderate-income service members. For the tax year 2024, the EITC is worth up to $7,830. Service members receiving nontaxable combat pay can leverage specific qualifications to potentially increase their EITC amount, resulting in a reduced tax liability or a larger refund. This credit is a crucial tool for enhancing the financial well-being of military families, providing them with much-needed support.

Moving expenses also present a significant opportunity for tax deductions. Active duty members of the U.S.

Armed Forces may deduct unreimbursed relocation expenses if their move is due to a military order and involves a permanent change of station. Furthermore, allowances paid for such moves are not taxable, offering additional financial relief. These provisions ensure that military personnel can transition smoothly between assignments without incurring undue financial strain.

When it comes time to file taxes, the Department of Defense offers MilTax, a comprehensive suite of tax services available at no cost to military members, qualifying veterans, and their families. This service is designed to simplify the tax filing process, providing expert guidance and support tailored to the unique needs of military personnel. MilTax is an invaluable resource, ensuring that service members can file their taxes accurately and efficiently.

In addition to MilTax, many military installations provide free income tax assistance through the military Volunteer Income Tax Assistance (VITA) program. This program offers in-person support, allowing service members to receive personalized assistance with their tax filings. By contacting their installation's legal office, military personnel can access these services, ensuring they maximize their tax benefits and comply with all filing requirements.

For more detailed information on the array of benefits available to military members, taxpayers are encouraged to visit the Military Family Tax Benefits page on IRS.gov. This resource provides comprehensive guidance on the various tax advantages, ensuring that military families can fully leverage the benefits to which they are entitled. By staying informed, service members can optimize their financial situation and focus on their vital roles in defending the nation.

Check: 

IRS expands direct file and announces tax changes for 2025

https://www.concernedveteransoh.org/post/irs-offers-tax-benefits-for-military-and-veterans