This post is the second in a three-part series covering tax tips and tricks for military members.
For every hoop the IRS makes you jump through with rules and bureaucracy, there are an equal number of deductions, credits and types of filing to save money and time that just require a little digging to discover.
This article features information about military tax deductions, earned income tax credits and filing separately as a married couple.
Failing to claim all available tax deductions can shortchange you on your refund or even leave you owing money. The following rundown includes some military-specific as well as civilian tax credits for which you may be eligible.
Another tax benefit military members may be interested is an Earned Income Tax Credit or EITC. An EITC is essentially a tax credit designed to lessen the tax burden for individuals and families with lower incomes.
Qualified individuals and families can receive anywhere from about $450 to $5,000. Among other requirements, the taxpayer must be between 25 and 65 years old, have an earned income and makes less than $3,150 in investment income.
Military members may be especially interested in the EITC because combat pay is not included in a servicemember’s income, making it easier to meet the income requirements. For more information about EITC and deployment, visit the MOAA website.
If you plan on filing for the EITC, be sure that you and your spouse aren't filing separately. Sometimes “Married, Filing Separately” or MFS can save a couple money when they have similar incomes, but in many cases the amount you will save won’t be more than filing for the earned income tax credit.
The third and final article in our Military Tax Tips & Tricks series will explore filing during deployment or while you’re overseas and ways to simplify what may appear to be a complicated process.
Buying a condominium with you VA home loan benefit is a great option. However, there are additional requirements that differ from purchasing a single-family residence or a multiunit complex.
VA loans allow Veterans to have a co-borrower or co-signer on the loan. Here we break down co-borrower requirements and provide common scenarios around co-borrowing and joint VA loans.