As a military spouse tax time can be a bit stressful to say the least -- here's answers to some of the most common questions.
For servicemembers, the first step to filing taxes is to figure the gross income. Members of the Armed Forces receive many different types of pay and allowances. Some are includible in gross income while others are excludable. Includible items are subject to tax and must be reported on your tax return. Excludable items are not subject to tax, but may have to be shown on your tax return.
Fortunately, servicemembers can exclude many items from gross income. The following is a list of includible and excludable items for gross income for military personnel:
The following items are includible in gross income, unless the pay is for service in a combat zone (where special rules apply). You must include these items when computing your annual gross income.
The following items are excludable from gross income. The exclusion applies whether the item is furnished in kind or is a reimbursement or allowance.
You can deduct mortgage interest and real estate taxes on your home even if you pay these expenses with your BAH.
Health Expenses and In-kind Benefits
Education Allowances and Benefits
Other Excludable Payments
Excludable In-Kind Military Benefits
Excludable Special Pay
For more information on compensation for service while in a combat zone and qualified hazardous area, see Combat Zone Exclusion.
Let's face it -- the American tax system isn't known for its simplicity. And the confusion factor just climbs higher when you lived or worked in more than one state during the year.
Servicemembers who recently enrolled in continuing education programs or signed up for skills building classes, have several government reimbursement programs and income tax benefits that can help ... more
To deduct moving expenses, you generally must meet certain time and distance tests. However, if you are on active duty and you move because of a PCS, you do not have to meet these tests.