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Tax considerations for military members

On Behalf of | Feb 5, 2018 | IRS |

Life in the military is not the same as the life of a civilian. Those in the military are often required to move for training and other obligations. The basics of their compensation can be different than those who work within the private sector. Due to these and other considerations, the tax filings of a military serviceman are often more complex than their civilian peers.

Military versus civilian: The difference in pay

One of the main examples involves pay. Something as simple as income is far from simple for those who are on active duty. Combat pay, for example, is generally not taxed. However, once a soldier returns from combat his or her pay shifts back to what is considered regular pay — which is taxable. If tax withholdings are not adjusted appropriately the soldier could receive an unexpectedly large deduction from his or her paycheck at a later date.

Military versus civilian: The difference in deductions

Another interesting consideration involves deductions. The new tax law removed a number of deductions, many of which will impact deductions normally taken by both civilians and military members. One example that many in the military will notice is the removal of the ability to take deductions related to uniforms. However, unreimbursed moving deductions remain available. According to a piece by Reuters, this form of deduction is common within the military. Surprisingly, one of the more common forms involves the deduction of costs related to moving pets.

The cost to move a pet with a soldier can be expensive. This is particularly true if a soldier is moving to another country.

Another issue that arises when soldiers move involve state tax obligations. These are just a few of the issues military members should consider when navigating their tax obligations. It is often wise to seek legal counsel in the event a tax filing results in questions or an audit from the Internal Revenue Service (IRS). An attorney can provide guidance and reduce the risk of financial penalties or other repercussions from the IRS.

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