5 military tax deductions service members can claim but often don’t

military tax benefits

As an active-duty military member, preparing and filing your tax return can be a nightmare. Regardless of your duties or where you’re stationed, tax season will cause you to stop what you’re doing to complete this important task.

However, Uncle Sam has taken into account your unique lifestyle with special tax laws. These include 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.

1. 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! However, you can claim all expenses used to keep those uniforms in tip-top shape. This is true if you are prohibited from wearing prescribed uniforms while off duty. These costs include all dry cleaning, alterations, corps devices and insignia of rank expenses.

Exceptions to Uniform Expense Tax Break

Active duty service members cannot claim uniform purchase expenses. A reservist restricted to wearing a uniform only while performing duties can claim the cost of purchasing uniforms on taxes.

2. Educational Expenses

You are probably aware of your Tuition Assistance (TA) and Post 911 Montgomery GI Bill educational benefits. In addition to these, you can claim work-related education courses as a deduction. For example, say you are a lieutenant commander with a degree in human resource management in charge of a personnel support detachment. You can decide to take a course to improve your skills within the human resources job field. Then you can deduct the educational cost of that course.

More on Eligible Educational Courses

Also, there is the unusual circumstance that an educational course or skill is not funded by the military. But this course is nonetheless needed to keep your job or position. This educational course is still a a deduction. (Keep in mind that the related educational course does not have to lead to a degree. You cannot deduct an educational course you’re completing to prepare you for a different skill or job position other than your current one.)

3. Transportation Expenses

Unfortunately, you cannot claim transportation to and from work 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 location on your own dime? When not under military cost orders, 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.)

Temporary Work Sites Covered

Good news is you can claim transportation back and forth to a temporary work site away from your regular place of duty. But 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. Note it’s against the law to receive transportation expenses from the military and claim the same transportation expenses on your tax return.

4. Professional Dues

Being a hero is only a part of what you do. However, for many of you, joining a civilian professional society can enhance your military job position. It can also 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. For example, the American Society of Electrical Engineers or the American Dental Association. Though you can claim all society professional dues, you cannot claim officers and noncommissioned officers club dues on your tax return.

5. Repayments

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. This is because it may fall under the category of a repayment deduction. Ensure you deduct the repayment in the same year that you paid it back to the government.

Important Note on Repayment

When adding repayment to your tax return, if you report the repayment as wages on your taxes, make sure to deduct it as an itemized deduction. In addition in this case, consider consulting and discussing your repayment deduction with a tax agent before itemizing this repayment.

Claim Those Military Tax Deductions

Most military members and their families do not take full advantage of these specific tax breaks. Over time, that could amount to throwing away thousands of dollars. What you do for us on a regular basis is very important. But including any deductions that you are entitled to on your tax return can potentially help your family avoid some financial hardship. 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.

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?

More about...Taxes, Planning

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There are 19 comments to "5 military tax deductions service members can claim but often don’t".

  1. Jordan says 24 February 2015 at 07:17

    Great article! I’ll have to let my friends who are serving know about all of this. I had no idea they could put stuff like dry cleaning their uniforms on their taxes! Thanks for sharing.

    • Petrish Dyer says 24 February 2015 at 14:21

      Yes, I was surprised about this too, but it is limited to those military members who are prohibited from wearing certain uniforms when off duty. Good luck with everything.

  2. Wiggles @FirstYouGetTheMoney says 24 February 2015 at 08:44

    The one downside to deducting the cost of your military uniform is even if you qualify to deduct the cost, it still must exceed 2% of your AGI before it becomes deductible. For example, if you made $50,000 in a year, your unreimbursed uniform expense must exceed $1,000 before any portion becomes deductible.

    • Petrish Dyer says 24 February 2015 at 14:28

      Thanks for the tip. With that being said, I always encourage my brothers and sisters in uniform to get advice from a tax agent or financial professional when it comes to filing our tax returns.

  3. Dean says 24 February 2015 at 09:57

    good advice…please allow me to add a couple more ideas.

    On every monthly payday, I used to counsel the Soldiers under my command regarding their finances. My pitch was that I could get them an extra $200 monthly (minimum) in their pockets using three simple concepts:

    1. Change your state of residence to Texas, Tenessee or Florida, thus avoiding withholding for state taxes.

    2. Adjust your W4 exemptions to eliminate any refund. No sense giving “Uncle” an interest-free year-long loan. This was a difficult concept for some to accept, as they had come to anticipate the refund as a form of illogical bonus.

    And with the additional funds, focus on saving / investing by…
    3. Forgoing the Savings Bonds that were constantly pushed and instead maxing-out the TSP contributions. TSP has proven to be the best investment I have ever made.

    • Chelsea @ Broke Girl Gets Rich says 24 February 2015 at 14:54

      Good points Dean! Thanks for sharing them.

    • Jarrod says 24 February 2015 at 19:00

      Washington State also has no state income tax. Additionally, if you can get your drivers’ license there it never expires as long as you are on active duty.

  4. Kim says 24 February 2015 at 14:30

    GReat advice to pass on. Thanks for writing.

    • Petrish Dyer says 24 February 2015 at 14:36

      Your so welcome Kim! Thanks for supporting our troops.

  5. Petrish Dyer says 24 February 2015 at 14:35

    Dean these are some really sound advice you are giving your Soldiers. For my first five years in the service I paid New Jersey state taxes, until someone knowledgeable contacted me and disclosed that as a military member I didn’t have to pay state tax to NJ. So I encourage all service members to verify if their states mandates paying state tax for there are many more states that don’t.

    As for the TSP I think that its an awesome investment tool and I also push it on all my Sailors. It is amazing how much it adds up when your about your mission and doing your thing.

    Its great that you are influencing our Soldiers to make better financial decisions. Keep up the good work.

  6. Steven says 24 February 2015 at 14:43

    How would you claim the transportation expenses on a tax return? Mapquest the distance between your home and base? Keep track of mileage on your vehicle? Then, once I know how much travel I’ve done for work, how do you put that down as a deduction?

    Thank you.

    • Petrish Dyer says 25 February 2015 at 00:51

      I would keep record of the dates and documents of the times you are assigned to a temporary duty station and provide them to a tax agent specialist to figure out the rest. I wish you the best of luck.

  7. Chris Stanley says 24 February 2015 at 15:58

    I’m an active duty Sailor currently deployed and I use Taxslayer.com. This site is free for military and it asks you all the above questions so you don’t forget to claim them. Those deductions never seem to make a big impact, but I guess something is better than nothing.

    • Petrish Dyer says 25 February 2015 at 00:54

      I have never used Taxslayer.com to prepare my taxes, but its really nice to know that these questions are already implemented in the system. Thank you for your service.

  8. kay ~ lifestylevoices.com says 24 February 2015 at 16:57

    Anything that can help our military members is a blessing. Wonderful post Petrish! 🙂

    • Petrish Dyer says 25 February 2015 at 00:55

      Kay, thank you so much for your support! Your the best.

  9. Tom says 06 March 2015 at 05:58

    Thank you Petrish. Appreciate you representing the mess. Also another thing to add with this, I know that Minnesota actually pays its military members an addition credit of $120 every month that they are on a deployment. So after you file your state taxes (which as military, they should not have been paying state taxes anyways), they will need to send in a M99 tax form with their LES for the months they were deployed (form found at http://www.revenue.state.mn.us/individuals/individ_income/Pages/Credit_for_Military_Service_in_a_Combat_Zone.aspx). A lot of people never knew about this, and it was retro-active back to 9/11. However, they have caught up a lot on the back pay of it, and you can only claim 2011 to the current year now. Great way to get your sailors some additional cash in their pockets.

    I have not heard of any of my other sailors having this benefit with their state, but it is always worth looking into.

    – Tom

  10. Jocelyn Stewart says 07 March 2015 at 16:48

    Thank you for a very informative post. Most military service members are not aware of all of these potential tax deductions or other benefits they might be eligible for.

  11. Doris Pullins says 02 May 2015 at 20:44

    Very insightful post. Thanks!

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