Your deployed Marine has 180 days (approximately 6 months) after returning stateside to complete his/her tax return. He/she will not pay a penalty if additional taxes are due as long as they file within 180 days.
Your Marine is also entitled to the "Combat Pay Exemption" which states that he/she will not pay taxes on income earned while deployed to a combat zone. Afghanistan and Iraq (including Kuwait or any other country if it is in direct support of operations OIF and OEF) are considered combat zone.
Your Marine will be given an opportunity to have a military accountant on a military installation assist with taxes upon return stateside. In most instances there is no charge for this service.
Some overseas locations, particularly those with established bases (but generally not combat zones) will have facilities to prepare taxes with your Marine during deployment.
Links and Online Information for Tax Filing
- Defense Finance and Accounting Service
Official website that has all information about military pay, tax information, and information on almost every possibility that exists that would affect military pay status. Also includes links for MyPay and all other official sites.
www.dfas.mil/index.html
- New Law Expands IRA Options for Military:
Members of the military serving in Iraq, Afghanistan and other combat zone localities can now put money into an individual retirement account, even if they received tax-free combat pay, according to the Internal Revenue Service. In addition, the HERO Act allows military personnel who received tax-free combat pay in either 2004 or 2005 to go back and make IRA contributions for those years. Eligible military members will have extra time, until May 28, 2009, to make these special back-year contributions.
www.irs.gov/individuals/military/article/0,,id=161266,00.html
- Military Pay Exclusion:
Questions and answers regarding combat zone pay, income tax exclusions, and other questions most commonly asked about tax issues relating to service in a combat zone.
www.irs.gov/newsroom/article/0,,id=101262,00.html
- Free Online Tax Filing to Many Members of Military:
The Internal Revenue Service reminds members of the military to take advantage of Free File, which allows taxpayers to prepare and e-file their federal income tax return online for free. Taxpayers who have an adjusted gross income of $52,000 or less in 2006 are eligible.
www.irs.gov/newsroom/article/0,,id=168230,00.html
- Miscellaneous Provisions - Combat Zone Service:
More questions and answers about tax issues while or after serving in a combat zone. These deal with IRA questions and allowable write-off expenses.
www.irs.gov/newsroom/article/0,,id=101266,00.html
Combat Zone Extensions Expanded to Contingency Operations
The various extensions granted to combat zone participants to file returns or pay taxes will also apply to those serving in Contingency Operations, as designated by the Secretary of Defense. This is effective for any acts whose deadline has not expired before November 11, 2003.
Department of Defense Homeowners Assistance Program
Payments made after November 11, 2003, under this program to offset the adverse effects on housing values of military base realignments or closures will be excludable from income as a fringe benefit.
Dependent Care Assistance Program
For tax years after 2002, dependent care assistance programs for military personnel are excludable from income.
Military Academy Attendees
For tax years after 2002, the ten percent tax on payments from a Qualified Tuition Program or Coverdell Education Savings Account that are not used for educational expenses does not apply to attendees of the U.S. Military, Naval, Air Force, Coast Guard or Merchant Marine Academies, to the extent the payments do not exceed the costs of advanced education.
Additional Information
If a taxpayer no longer has copies of his or her previous tax returns, the taxpayer may use Form 4506, Request for Copy of Tax Return, to order an earlier year’s tax return, or Form 4506-T, Request for Transcript of Tax Return. The IRS charges $39 for each return requested, but charges nothing for a transcript. IRS forms are available on this Web site or by calling toll-free 1-800-TAX–FORM (1-800-829-3676). More information on the Military Family Relief Act of 2003 and other tax issues affecting the military can be found in IRS Publication 3, Armed Forces Tax Guide, also available on this site or through 1-800-829-3676.
The tax laws provide some special benefits for active members of the U.S. Armed Forces, including those serving in combat zones.
For federal tax purposes, the U.S. Armed Forces includes officers and enlisted personnel in all regular and reserve units controlled by the Secretaries of Defense, the Army, Navy and Air Force. The Coast Guard is also included, but not the U.S. Merchant Marine or the American Red Cross. However, these and other support personnel may qualify for certain tax deadline extensions because of their service in a combat zone.
Links and Online Information
- Questions & Answers on Combat Zone Tax Provisions
Military Pay Exclusions, Deadline Extensions and Miscellaneous Provisions for Qualifying Taxpayers; Employers
http://www.irs.gov/newsroom/article/0,,id=107467,00.html
- Military Peronnel Contacting IRS Directly via Email
A Combat Zone E-mail Address for members of the Armed Forces or their families worldwide to alert the IRS that they are serving in a combat zone.
http://www.irs.gov/newsroom/article/0,,id=101261,00.html
- Publication 3, Armed Forces' Tax Guide
Addresses a wide range of issues that may affect members of the military:
Other Items of Interest
(may include documents from previous tax years):
- Tax Tip 2005-40
Reservists, Enlistees May Get Deferral for Back Taxes.
http://www.irs.gov/newsroom/article/0,,id=108001,00.html
- Military Family Tax Relief Act of 2003
Tax breaks related to military service, including two provisions that may require amended returns.
http://www.irs.gov/newsroom/article/0,,id=118104,00.html
- IR-2003-132
IRS Helps Military Personnel Get New Law's Tax Breaks
http://www.irs.gov/newsroom/article/0,,id=118106,00.html
- IR-2003-63
New Tax Scam Targets Families of Armed Forces Members
http://www.irs.gov/newsroom/article/0,,id=109570,00.html
- Notice 2003-21
Tax Relief for Those Involved in Operation Iraqi Freedom.
http://www.irs.gov/pub/irs-drop/n-03-21.pdf
- IR-2003-43
Tax Assistance for Military Families; IRS.gov Page for Armed Forces
http://www.irs.gov/newsroom/article/0,,id=108523,00.html
- Fact Sheet 2003-11
Information for Taxpayers Serving in the Armed Forces
http://www.irs.gov/newsroom/article/0,,id=108525,00.html
- News Release IR-2002-18
Tax Relief for Troops in the Afghanistan Combat Zone.
http://www.irs.gov/pub/irs-news/ir-02-18.pdf
- Notice 2002-17
Tax Relief for Those Involved in Operation Enduring Freedom.
http://www.irs.gov/pub/irs-news/ir-02-18.pdf
All items above may be found from the Internal Revenue Service website at http://www.irs.gov/. This guide is for informational purposes only, MarineParents.com, Inc. recommends you consult a qualified tax professional with any questions or concerns regarding their personal taxes.
