7 Tax Ways America Appreciates the Military

May is Military Appreciation month in honor of those who serve or have served our country in the Armed Forces. So this seems to be an appropriate time to recognize some of the tax advantages bestowed on the troops and other military personnel, reservists and veterans.

Notably, the tax law provides more leeway for filing tax returns to the military and tax exemptions for certain types of income. Here’s a list of seven top tax breaks to call to arms.

1. Tax filing extension. For virtually everyone else, the due date for filing your federal income tax return is April 15 of the year following the end of the tax year (or the next business day if it falls on a weekend or holiday). However, if you’re performing military services outside the U.S. on that date, the deadline may automatically be extended to June 15. Caveat: As with the regular filing extension, this isn’t an extension to pay the required tax.
2. Tax return signature. When a married couple files a joint federal income return, both spouses are required to sign the form. But that can be difficult, if not impossible, if one spouse is serving in the military, especially if he or she is overseas In this case, only the signature of one spouse is required.
3. Combat zone pay. If you’re on active duty in an active combat zone, any military pay you receive for that period is completely exempt from tax – no questions asked. In fact, you don’t even have to worry about excluding the income on your tax return because it won’t be reported on your W-2.
4. Veterans benefits. There’s a wide range of tax-free benefits available to our military veterans ranging from a 100% tax exemption for disability compensation paid to a disabled vet to tax-free pensions for permanently-disabled wartime veterans over age 65. However, if you receive a disability pension based on your years of service, you must include that amount or portion of a pension in your taxable income.
5. Travel for reservists. If you’re a member of the Armed Forces Reserves, you are entitled to deduct certain travel expenses while in the line of duty, including a deduction for unreimbursed expenses when you must travel more than 100 miles away from home to perform your military duty.
6. Moving expense deductions. Military families are constantly on the move from base to base. Unlike other taxpayers, you don’t have to meet strict tax law tests concerning time and distance, although the other tax rules for moving expenses generally apply.
7. ROTC allowances. The tax breaks aren’t necessarily limited to taxpayers out of school. For participants in the Reserve Officers’ Training Corps (ROTC) program at a college, education and subsistence allowances generally aren’t subject to tax. But if you receive active duty pay at a ROTC camp in the summer, that amount is taxable.