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Tax Benefits for Armed Forces Members

Members of the military and their families may qualify for certain tax breaks. The special rules may lower the tax that is owed or give them more time to file and pay their taxes. The following are some highlights of the potential special tax benefits for military members:

• Combat Pay Exclusion – If a person serves in a combat zone then part or all of their combat pay is tax-free. This also applies to if a person is working in an area outside a combat zone as long as the Department of Defense certifies that the area is directly supporting military operations in a combat zone. There are limits to this exclusion for commissioned officers.

• Tax Return Extensions – Some members of the military can postpone most tax deadlines. The following is an IRS link with FAQ’s regarding this topic:

https://www.irs.gov/newsroom/extension-of-deadlines-combat-zone-service

• Earned Income Tax Credit – If a person in a combat zone is receiving nontaxable pay, they may choose to include it in their taxable income to increase their Earned Income Tax Credit.

• Signing Joint Returns – If military service prevents both spouses from signing a return then one spouse may be able to sign for the other.

Please consult your tax advisor on all the above information.

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