(Petrish Dyer is an active military Navy Chief, currently stationed in Japan. Please understand that her duties and time zone may prevent her from responding to comments in a timely manner even though she would like to. Petrish is also the founder of debtfreemartini.com where she blogs and inspires others to live a debt-free life.)
As an active-duty military member, I know that preparing and filing your tax return can be a nightmare. Regardless of the duties you perform policing our borders or standing strong in a combat zone, and regardless of where you are stationed on the globe, tax season will cause you to stop what you are doing and find time to complete this important task.
It is awesome that Uncle Sam has taken into account your unique lifestyle, implementing special tax laws such as the extension of deadlines for filing and paying taxes while on active duty in a combat zone; but did you know that there are quite a few military tax deductions and credits that are hardly claimed?
Here are five tax breaks that many military members are eligible for but rarely claim on their tax returns.
Unreimbursed uniform expenses
There is nothing like seeing one of our heroes in a sharp uniform – and we know it takes time and money to look that good on a daily basis! – but if you are prohibited from wearing prescribed uniforms while off duty, you can claim all expenses used to keep those uniforms in tip-top shape. Unreimbursed expenses for the upkeep of your uniforms would include all dry cleaning, alterations, corps devices, and insignia of rank expenses. Active duty service members cannot claim uniform purchase expenses; but if you are a reservist and restricted to wear your uniform only while performing your duties, the cost of purchasing your uniforms can be claimed on your taxes.
I am sure you are aware of your Tuition Assistance (TA) and Post 911 Montgomery GI Bill educational benefits, but did you know that work-related education courses can be claimed as a deduction? For example, if you are a lieutenant commander with a degree in human resource management in charge of a personnel support detachment and have already fully qualified for the position but you decided to take a course to improve your skills within the human resources job field, you can deduct the educational cost of that course.
Also, under the unusual circumstance that an educational course or skill which is not funded by the military but is nonetheless needed to keep your job or position, that educational course can be also considered a deduction. (Keep in mind that the related educational course does not have to lead to a degree and any educational course that is completed to prepare a service member for a different skill or job position other than what he or she is presently serving in cannot be deducted on their taxes.)
Transportation to and from work cannot be claimed as a deduction on your taxes, but how many times have you had to travel from your designated place of duty to attend a meeting at another building or location on your own dime? When not under military cost orders, did you know that you can claim the cost of transportation whether it is by car, bus, rail or taxi? The transportation expense deduction also goes as far as covering the cost of the maintenance for your car! (I know. I was shocked by this too.)
Did you know that transportation back and forth to a temporary work site away from your regular place of duty can also be claimed on your taxes? Well, I’m here to tell you that it can – but you have to be careful because there are special rules to determine if that work site assigned is actually considered a temporary location. You must be assigned to travel to the temporary work location for less than a year to claim the transportation expenses. It is also important to note that it is against the law to receive transportation expenses from the military and claim the same transportation expenses on your tax return.
Being a hero is only a part of what you do; but for many of you, joining a civilian professional society can enhance your military job position and help open doors for you once you retire your combat boots for good. Did you know that you can claim on your tax return all unreimbursed dues that are paid to a professional society, such as, the American Society of Electrical Engineers or the American Dental Association? Just be advised that, even though all society professional dues can be claimed, officers and noncommissioned officers club dues cannot be claimed on your tax return.
No one likes to pay money back to the government, but unfortunately it happens sometimes. If you had to use a portion of your wages to pay back the government in the amount of $3,000 or less, don’t be discouraged. You may be able to recoup some of that money to put back into your savings account because it may fall under the category of a repayment deduction. The key thing to know is that you have to deduct the repayment in the same year that you paid it back to the government. Also, when you add this repayment to your tax return, if you report the repayment as wages on your taxes, make sure that it is deducted as an itemized deduction. Also in this case, I think it is important to consult and discuss your repayment deduction with a tax agent before itemizing this repayment.
Most military members and their families do not take full advantage of the tax breaks that are specifically created by law to help them save more money – and, over time, that could amount to thousands of dollars being just thrown away. What you do for us on a regular basis is very important, but making sure you include any deductions that you are entitled to on your tax return can potentially help your family avoid some financial hardship by reducing the taxes you owe. To educate yourself on tax laws, credits, and deductions for military service members, you can download Publication 3 (2014) Armed Forces’ Tax Guide from the IRS website for more information.
So while you gather all your tax documents and review your checking and savings accounts to see what tax breaks you can get this year, think about if any of these tax deductions apply to you and get your tax break.
Whether you are active military or not, are you taking advantage of your tax breaks properly? Have you ever discovered a tax break you were entitled to but didn’t know to claim?
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