Military Tax Preparation Checklist
Active Military Personnel and Veterans
It's never too early to brush up on your income tax knowledge to get a better understanding of how your military affiliation effects your income tax filing requirements.
Members on active military duty, transitioning military, and veterans are qualified to take advantage of many tax deductions and benefits that are part of their total compensation.
Our Military Tax Preparation Checklist is designed to help armed force personnel minimize their income tax obligation and reduce their overall taxable income.
Military Tax Filing, First Things First
Determine if you can qualify for free tax preparation and filing through any of the tax filing support services available to current and former members of the armed forces and their families.
Some of these services include:
IRS Volunteer Income Tax Assistance (VITA)
- for tax filers who meet limited income qualifications, tax filers with disabilities, and limited English speaking taxpayers
- IRS Funded
Tax Counseling for the Elderly (TCE)
- for taxpayers who are 60 or older - eligible tax support organizations provide tax assistance to elderly taxpayers thru IRS funded volunteers for tax counseling assistance
- United Way MyFreeTaxes allows active military and veterans earning less than $60,000 to file their federal and state taxes for free
- IRS Free File, offers free tax filing using Brand-name tax software services to qualifying taxpayers
- TurboTax Military Tax Filing software products
- H&R Block Sponsored Military OneSource Free Tax Filing Services
Military Tax Filing Documentation Checklist
- Names and taxpayer numbers as on Social Security Card (SSN)
- Individual Taxpayer Identification Numbers letter (ITIN)
- For you and your dependents (children, elderly relatives, etc).
- Date of birth and relationship (son, daughter, mother, etc.).
- Your bank routing number and savings or checking account number for tax refund direct deposit
- Employment income earned statements
- Interest earned statements from savings & investment accounts
- Copy of previous year’s tax return
- 1095-A for credit received from the healthcare.gov marketplace
- 1098's payments made for (school loans, property tax)
- 1099's other income (contract work, unemployment compensation, social security, school loans, health care reimbursement, state tax refund, gambling winnings, etc.)
- W-2s for jobs held by each person in the household, this includes names, wages, and IRS tax information
Tax Deductions and Tax Breaks Checklist
- Business expenses and assets: self-employed / small business
- Charitable donations: contributions and amounts, receipts for donations over $250.
- Childcare expenses: child care provider name, address, Tax ID / Social Security Number
- Education expenses: college loans, scholarships received, college or university technical/community expenses (Forms 1098-T/1098-E).
- Educator expenses: out of pocket classroom school supplies and materials for teaching grades K-12.
- Homeowners expenses: mortgage interest (Form 1098), real estate taxes paid, closing statement and fees
- Individual Taxpayer Identification Number: (ITIN) for you and family members on joint and dependant tax returns
- Rental payments: amount personal residence rent paid
- Retirement Account Statement: amount contributed to an IRA and total value as of December of tax year being filed
- Vehicle expenses: sales tax, personal property tax, total miles driven, miles driven for business.
Military Taxpayer Things To Know Checklist
- Extended tax filing deadline: combat zone or qualifying support status outside combat zones qualify for tax extensions
- Taxable income: minus non-taxable income received including:
- Combat pay, Basic Allowance for Housing (BAH) and the Basic Allowance for Subsistence (BAS)
- Deductible active duty moving expenses: Reasonable expenses for moving due to a permanent change in station can be deducted
- Travel and transportation expenses: reserve components of the Armed Forces can deduct service related travel expenses for traveling 100 miles or more away from home
- Uniform expenses: Uniform costs typically are not deductible unless restrictions from wearing your uniform when off duty apply
- Education deductions: education expenses are deductible if:
- It's required by your employer or the law
- It maintains or improves skills needed at you job
- Veteran Benefits: Spouses, children and parents of a deceased or disabled veteran also qualify for benefits
- Property Tax Exemption: Disabled veterans can pay reduced or
no property tax on their primary residence provided:
- the full value doesn't exceed $150,000,
- the household income doesn’t exceed $40,000
- Education and Training Allowances: 36+ month personnel are eligible for education allowance benefits. Financial aid from the Post-9/11 GI Bill doesn't have to be reported as taxable income
- Survivors and Dependents Tax Benefits: VA’s Dependency, Indemnity Compensation, one-time death gratuity, and pension payments are not taxable and don't need to be reported
- Life Insurance: Non-taxable proceeds include:
- Servicemembers’ Group Life Insurance
- Traumatic Injury Protection
- Service-Disabled Veterans’ Insurance
- Veterans’ Mortgage Life Insurance
- Housing Grants: This is a benefit for disabled veterans to modify their house for special needs access and use
Make sure all information you provide to the IRS is correct. Make sure correct forms were used, information is listed correctly, and correct filing status is selected.