Military Personnel and Their Families May Qualify for Free Tax Assistance

If you are serving in the armed forces, or are currently stationed in a combat zone, then the IRS wants you to know that special tax assistance is available to you, and in many cases, your family as well.

Free tax assistance is available for military personnel during tax season. Additionally, those who are stationed abroad or are deployed to a combat zone may receive an automatic extension related to filing and payment on federal tax. A portion of your military pay may also qualify to be excluded from taxation.

By definition, a combat zone is any area, designated by the President via Executive Order, as an area in which the U.S. Armed Forces are engaging or have engaged in combat. The Executive Order carries formal dates that an area is initially designated such, and also when that designation is concluded.

Filing Extension

If you are in a branch of the military (Army, Air Force, Navy, Marine Corps or Coast Guard) and are stationed outside of the US and Puerto Rice on the due date of your return, you are automatically eligible for a two month extension, until June 15^th, to file your tax return.

You can also choose to request the automatic six month extension that is available to all taxpayers. Form 4868 allows taxpayers to submit their return by the 15^th of October. The form must be filed on, or before, the due date of the return. It is not necessary to provide a reason in order to obtain the six month extension.

If you take advantage of the two month military extension, but find that you still need additional time, then you can also opt to send in the Form 4868 by June 15^th. If you are doing so, be sure to check box 8 to indicate your temporary status as 'out of the country.'

As with any extension, the additional time to file does not also grant added time to make payment. An estimation of any tax due must still be paid by the original due date of the return; penalty and interest may be charged on any shortfall.

However, if you are serving in a qualified combat zone, as defined above, you qualify for additional considerations and extensions. A minimal of 180 days will be allowed for the filing and payment of tax. Additionally, collection of any delinquent balance you owe the IRS will be suspended.

The IRS has an internal mailbox set up for taxpayers to notify them of any combat zone exclusion: combatzone@irs.gov .

Free Tax Filing

All military personnel and their families are also encouraged to take advantage of the IRS Volunteer Income Tax Assistance program. Trained volunteer assistors are able to address military-specific tax issues, such as filing deadlines when outside the United States, combat zone tax benefits, and the Earned Income Tax Credit guidelines.

In order to have your tax return prepared and submitted electronically for free at a local VITA site, you will need the following items:

* Valid form of identification (driver's license or military photo ID)
* Social Security Cards for you, your spouse and any dependents, as well as dates of birth
* Wage and earning statement(s) from all employers as well as interest and dividend statements from banks
* A copy of last year's federal and state returns, if available
* Proof of bank account routing numbers and account numbers if you elect to have your refund directly deposited.
If you are filing a joint return, both spouses must be present to sign.

For locations of the nearest volunteer sites near you, use the IRS Nationwide Free Tax Preparation Site List, where you can locate an office by state.

Combat Zone Pay Exclusion

According to IRS Publication 3, Armed Forces Tax Guide, if you are serving in a combat zone, or hospitalized as a result of your service in the designated combat zone, your combat pay may be excluded from your taxable income. You do not have to actually receive the pay when you are in the combat zone.

This income does not need to be reflected on your tax return; it should not even be included on your W-2.

For more information, visit the Tax Information for Members of the Military page at irs.gov.

More from this Contributor:

How to obtain IRS forms and publications

Do you qualify for assistance from the IRS Taxpayer Advocate Service?

Representation before the IRS - What you need to know