Taxes
Taxes
Nearly all pay — whether basic pay, hazardous duty pay, or incentive pay — is taxable. One exception is pay received as a stipend for participation in the Armed Forces Health Professions Scholarship Program. Allowances are also taxable. These include the Basic Allowance for Housing (BAH), the Basic Allowance for Subsistence (BAS), and allowances for uniforms, meals, and items furnished in kind (rations, transportation, and accommodations). Service members who know they will be deployed when their income taxes are due should decide in advance how their taxes will be filed and by whom.
| …how to file your taxes from overseas? |
| If you are overseas and have an APO or FPO address, send your return to:
Internal Revenue Service Center, Philadelphia, PA 19255-0215. |
| …that you can get an extension to file your taxes after April 15? |
| Learn about the Combat Zone/Qualified Hazard Duty Area extensions. |
Visit the Military Tax Guide Web site to obtain extensive information about how and where to file your taxes, filing date extensions, credits, and more. Selected information from that Web site is summarized below. Click on a link to learn more about tax issues for National Guard service members.
How to File Late: Combat Zone/Qualified Hazard Duty Area Extensions
Tax Forms and Filing Information
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How to File Late: Combat Zone/Qualified Hazard Duty Area Extensions
Within the United States. To receive an automatic 4-month extension to file your return do any of the following:
- File a paper Form 4868.
- File Form 4868 by phone or over the Internet. See the instructions for Form 4868.
- Pay part or all of your estimate of tax due electronically by using a credit card. (If you use this option, you do not have to file Form 4868.)
You will not receive notice of approval: the extension of time to file is automatically granted. Your request for an extension must be made within a timely manner. The IRS will notify you if your request is denied.
Do you need more than a 4-month extension? If so, either file Form 2688 or write a letter to the IRS. Keep in mind that a Form 4868 must be filed before you request additional time from the IRS. You must prove undue hardship cases to get an extra extension if you have not filed a Form 4868.
Outside the United States. You can qualify for an automatic extension until June 15 without filing Form 4868 if you are stationed overseas on an assigned tour of duty for a period that includes the entire due date of the return. You must attach a statement to your return to illustrate how you satisfied this requirement. You can request an additional 2-month extension to file by August 15, 2003, by filing a paper Form 4868 by June 17, 2003. Write “Taxpayer Abroad” across the top of Form 4868.
You can request an extension beyond the 4-month extension by filing Form 2688 or by writing a letter to the IRS. Keep in mind that a Form 4868 must be filed before you request additional time from the IRS. You must prove undue hardship to get an extra extension if you have not filed a Form 4868.
Click here to learn more about the Combat Zone/Qualified Hazard Duty Area Extension.
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Tax Forms and Filing Information
The Defense Finance and Accounting Service’s (DFAS) myPay system includes on-line forms. A personal identification number is needed to access personal accounts. Those who do not remember receiving their PINs or can’t remember their numbers can go to the DFAS Web site to request the information. Due to security reasons, PINs are mailed to recipients, which can take from 3 to 7 days after the request.
You will receive a W-2 Form annually showing the total amount of taxable wages for the previous year and total federal, state, and Social Security taxes withheld from your National Guard pay. Remember, you can use the myPay Web site to obtain your W-2 form electronically.
You can download federal tax forms from the IRS’s Forms and Publications Web site and file electronically using the IRS’s e-file function. You can download state tax forms from your state tax agency. For more information on filing and military tax guidelines and deductions, read the Armed Forces Tax Guide.
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Avoid Being Taxed Twice
Members whose civilian employers pay them the difference between their National Guard pay for annual active duty for training and their civilian pay for that period may end up being taxed twice. The civilian employer may report as taxable income the full salary for the two-week period without reducing the amount for military reimbursement. The DFAS will deduct taxes from the National Guard member’s military pay as well. This can be corrected either by obtaining a corrected W-2 Form or reducing the amount of income reported in the tax return and including a narrative explanation.
Some service members are entitled to a credit on their tax return for excess Social Security tax withheld from their military pay. State taxes are withheld from your pay if the state has such an agreement with the U.S. Treasury.
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Child Tax Credit
Many low-income families are eligible for the Child Tax Credit (CTC)—a federal tax benefit worth up to $1,000 in 2004 for each dependent child under age 17. These families may also be eligible for Earned Income Credit (EIC).