Taxes and the military

American flagUS Armed Forces include officers and personnel in the Marines, Army, Navy, Air Force and Coast Guard, but not the US Merchant Marine.   Special rules apply to active military members.  Information found here is intended to provide a general overview focused on extension deadlines.  You should consult a tax professional to address the complexities of those in active military service.


Military members often ask how they can comply with income tax filing requirements when they are stationed thousands of miles from home or are serving in a combat zone.  If you are outside of the United States on the filing deadline, you are automatically allowed an extra two months to file your return without filing a form.  To have an additional four months, however, you must file an extension request by June 15th. 

If you are serving in a combat zone, hazardous duty area or contingency operation, you automatically qualify for an extension of time to file your tax return.  The extension is for 180 days after the later of (1) the last day you are in the combat zone or contingency operation or (2) the last day of any continuous qualified hospitalization for injury from such service.  In addition, it is extended by the number of days remaining to file the taxes when entering the combat zone or serving in the contingency operation. 

Spouses of those serving in a combat zone or contingency operation are allowed the same deadline extensions except (1) if the tax year began more than two years after the combat or contingency operation ended or (2) if the member was hospitalized in the United States for combat or contingency operation injuries.  Dependent children are also allowed the same deadline extensions.

Extensions are allowed for filing any income, estate, gift, excise and some employment returns as well as paying the related taxes.  Collection and examination actions may also be extended.  Extensions are allowed to make timely qualified retirement contributions to an IRA when the tax return is under an extended deadline.  If you are in a combat zone, interest and penalties related to the extension period are not charged for failure to file or pay taxes. 
It may be possible to delay paying your income tax if you are unable to pay due to your military service.

Some types of pay are included in gross income while others are not.  Although combat pay is not taxable, it is included in compensation when determining IRA deductions and limits.  Different rules apply to whether moving expenses are deductible for military members.  Sale of home tests can be suspended during military service to qualify for exclusion of gain.  Travel expenses while away from home are based on your permanent duty station (such as a ship or base).  Only certain uniforms and articles not replacing regular clothing are deductible. Dues and excess educational expenses may be deductible.  In the event of a combat zone related death tax liability may be forgiven or refunded.

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About Judy Murray, CPA