Tax Tips for Military Spouses

Tax Tips for Military Spouses
Tax season is complicated enough, and when you add military spouse income and residency questions to it, it gets even more difficult. (Stock photo)

As a military spouse tax time can be a bit stressful, to say the least.

There are regular tax questions:

  • What are the new changes to tax law?
  • What can I deduct?
  • Who can I claim?

Then there is an entirely new set of questions because you're a spouse of a service member:

  • How do I file our joint return with my service member deployed?
  • What state do I file my taxes in?
  • What benefits are we allowed as military?

Related: Top Tax Tips for Military Personnel

To answer most of the commonly asked questions the Internal Revenue Service (IRS) has an Armed Forces' Tax Guide available for download - IRS Publication 3, which summarizes many important military-related tax topics. Publication 3 may also be ordered by calling 1-800-TAX-FORM (800-829-3676).

Prior to 2009, there wasn't much relief for military spouses. They generally had to pay income taxes to the states where their spouses were stationed.

Under the Military Spouses Residency Relief Act signed into law on November 11, 2009, military spouses who earn income in the state where their spouse is stationed may be able to claim either the state they are located in or their spouse's legal residence (if they have established residence there as well) for tax purposes. This only matters if the spouse has an income of their own. That could generate big savings if their spouse's legal residence has lower tax rates — or no income tax at all.

Related: Understanding the Military Spouse Residency Relief Act

Tax laws vary from state to state, so you and your spouse will need to weigh the tax and filing benefits before selecting the state that you will file. Some other factors that could also influence which state to pick; voter registration, auto registration, in-state college savings plans and in-state college tuition savings, car, home or other insurance, wills and estate plans, powers of attorney, and spouse's business/professional licenses.

If your spouse is deployed, remember that you have 24/7 access to W2 and other pertinent tax information via MyPay. Additionally, typically joint returns must be signed by both spouses. However, if your service member is away from home, they can grant you power of attorney to file a joint return on their behalf.

Related: Free and Discounted Tax Preparation for Military Personnel

Fortunately, most military installations offer tax help to service members and their families through the Volunteer Income Tax Assistance Program (VITA). VITA's certified community volunteers are trained by the IRS and understand military-specific tax issues. Those services can be accessed for free via your local installation. 

Keep Up With Military Pay Updates

Military pay benefits are constantly changing. Make sure you're up-to-date with everything you've earned. Join for free to receive updates on all of your military pay and benefits, delivered directly to your inbox.

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