In order to be able to file your taxes one has to compute their gross income. Members of the U.S. Armed Forces can receive a lot of different types of allowances and Pay. Some of these you are able to include in figuring out what your gross income is, and some of them you cannot. Ones that you exclude are not taxable; ones you include are taxable and have to be reported on your tax return. There are a lot of items that can be excluded from your gross military income. Here is a partial list that shows some of the items you can include, and ones you should exclude from your gross income.
Items To Include: The following things should be included in figuring your gross income. NOTE: If you have pay for Combat service, there are different rules. Otherwise these things should be included: Basic Pay: Active Duty Pay. Back Wages or Duty Pay. Training Duty Pay. Reserve Training Pay. Drills and Drill Pay. Pay for attendance at a Service related or designated School. Special Pay The following types of Special Duty Pay should be included: Aviation Career incentives. Foreign Duty outside the 48 states. Special Duty Pay. Medical and Dental Pay. Hostile duty pay. Re-enlistment and Enlistment bonuses. Student loan repayment. Accrued leave pay.
Items to Exclude:
The following can be excluded from your personal gross income. Exclusion does not matter if it is a reimbursement, allowance, or furnished in kind item: Housing and Allowances: Basic Allowance for Subsistence. Dislocation allowances. Move in Housing Allowances. Basic Allowance for Housing. Housing and various COLA (cost of living) allowances paid overseas. Overseas Housing allowances. Real Estate Taxes and Mortgage Interest on your home loan.
Moving Allowances: Storage. Move-in Housing. Dislocation. Moving trailers or mobile homes. Moving household and Personal Items. Temporary lodging and temporary lodging expenses.
Most Servicemembers would benefit from having their taxes done professionally, or asking at their local JAG office about tax services available for Servicemembers. There are literally dozens of exemptions and exceptions, so it is worth your while to get some assistance in making sure you are not paying any taxes that you are not obligated, while getting the credits you qualify for. It is important to write down all the information and have as many of the documents you will need, and have them handy for your tax preparer. The money you may spend on getting your taxes done will more than be made up for the savings you will realize by not missing areas you might not be aware of. The tax savings can add up swiftly.
Engraved Gifts says
Very good post. I’m facing many of these issues as well..
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Your annuity pdvrioer is required to send you a Form 1099-R. It will show the gross amount that you received and the taxable amount as well. If you didn’t receive a 1099-R, call the company and request one. You can exclude from taxable income the portion of the payment that is your own money coming back to you. I THINK that the tax-free amount would be $1,000 per year but you need to get the 1099-R to be sure.