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?
Military tax deductions you should claim
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.
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.
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?