Taxes 101: The Basics of Filing Your Taxes

Service member having a discussion at a desk in front of a computer.

Taxes stop for no one, not even for active members of the military. Even if you're in a combat zone, you're still expected to file taxes the same time as civilians do, though you can file for an extension. So get cracking—April 15th isn't far away.

In this article, we offer a few tips to help make tax season less stressful for you, even if you're stationed abroad.

Get Organized

Make your life a lot easier by organizing all of your documents in one place. You should have received all of your documents from your investment accounts, banks, and the government by now. If not, notify your military paymaster and financial institutions now.

Because military personnel also receive tax breaks that civilians don't enjoy, you'll also want to look for receipts for all military-related expenses, including moving expenses, mortgages, and educational courses. You may be able to get a deduction and lower your taxable income significantly.

Don't underestimate this step—organizing your documents can take several hours. The pay-off is in completing your 1040s: being organized will help this process along.

Tax Extensions

Just like civilians, members of the military can request extensions on their taxes. If you're stationed in the United States or in Puerto Rico and you need an extension, file one with Form 4868. You'll receive an extension to October 15th.

If you're stationed abroad, your deadline is automatically extended by two months. You don't need to request this formally, it will be done for you.

If you're currently stationed in a combat zone, your tax deadlines can be extended from your first day of service there. The basic extension is 180 days, but it can continuously be extended depending on your length of service.

What State?

For the most part, you will file taxes to your permanent resident home state, not the one you're stationed in. In military terms, you'll be filing in the state that is your Home of Record.

Free Tax Help

It's not easy to file taxes, and it can be even more complicated if you're stationed abroad. As someone in the service, you can get free tax preparation help from a wide variety of sources.

  • If you make less than $58,000, you are eligible to file with Free File straight from the IRS.

  • If you're stationed abroad, you may be able to find an IRS office or embassy/consulate that offers tax assistance services. You can check here to see if you are near an office.

  • If you're on base, you may also be able to access the services of a volunteer tax preparation corps. This allows you to have your taxes prepared for free by volunteers. The service is vetted by the IRS, with volunteers trained and certified by the organization.

  • Military OneSource provides both free filing and financial planning assistance to service members. They provide a version of H&R Block's software free to military personnel.

  • If you're E1-E5, you can file free federal and state taxes with Turbo Tax.

Conclusion

Whatever you do, just remember to file your taxes in a timely manner and get professional help if you feel like you don't understand what you're doing or think you might be missing out on important deductions or credits. And if you ever find yourself owing money to the IRS, read our blog post on how to pay off IRS tax debt.

Fiona Lee is a personal finance writer for ReadyForZero, a website that helps people get out of debt faster on their own. She is a frugalista who loves discovering new ways to save money, especially in expensive cities. After living in New York and Beijing, she now makes her home in San Francisco. You can follow @ReadyForZero and @moderntime on Twitter.

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