If you’re a member of the military, taxes may be a slightly different endeavor for you than any other federal employee. There are several tax-related benefits to being in the military that may come as a surprise- did you know that if your expenses for purchasing a uniform are over 2% of your adjusted gross income, you can deduct those expenses when you file your taxes?
If you were in combat or a hazardous duty area while you served, there is no need to report the earnings you gained during that time. Of course, social security and Medicare will still be taken off of that income, and depending on your state, you may have to pay local taxes.
If you are not in the country to file your taxes come April 15th, you don’t have to worry. An automatic two-month extension will be applied to your filing deadline so there is no need to panic if you can’t make it back in time. If you are stationed in a combat zone, there is even more leeway- the IRS will grant 180 days’ extension either from the time you get back from combat, or when you are released from the hospital for injuries sustained in the combat zone. Also, if you are married and filing jointly, these extensions will also apply to your spouse, leaving breathing room for both of you, even if your spouse is not in the military.
You also have the opportunity to get free tax help- most military bases will offer professional support with your taxes, which, in light of the over $200 most Americans will pay to file their taxes this year, is a massive help. Finally, a TSP plan can be an excellent way to set aside pre-tax income to grow tax-deferred, up to $18,000 a year for adults under 50 years old. Remember too, when you are planning on retiring with a TSP annuity, you may be missing out on opportunities to generate more retirement income with other alternatives. TSP-withdrawal.com can put you in touch with professionals who can help you as you approach retirement, guiding you through the often very complicated process of withdrawing from your TSP to maximize your retirement income to the standard you are hoping to achieve.
Remember, no decision should be made without consulting a financial professional. The opportunity to save money could be readily achievable with the right help and guidance.
