Members of the military enjoy certain tax benefits that are not available to civilians. These tax advantages are designed to recognize the unique challenges and expenses that military personnel face throughout the duration of their service.
Learn more about the various tax deductions and write-offs available to military members in 2024 and discover our tips for filing your taxes as a service member.
Types of Military Tax Deductions
There are four primary categories of military expenses that may be eligible for tax deductions:
- Travel and lodging
If you are a member of the Armed Forces on active duty and you move due to a Permanent Change of Station (PCS), you are entitled to a deduction for reasonable unreimbursed moving expenses related to travel and the cost of moving household goods. This deduction can help alleviate some of the financial burden associated with frequent military moves.
You also may not have to pay taxes on the entire profit from selling your home before a military move. If you have sold your “main home,” defined as your primary residence of at least two years, you could be eligible for a deduction of up to $250,000 of gain or $500,000 if filing jointly with your spouse. However, you may not deduct any losses you incur from the sale of your main home.
At the federal level, tax deductions for military uniforms are not currently available, but some areas offer this deduction on a state-by-state basis. To qualify for a uniform deduction, the cost must have been incurred for a uniform that you are unable to wear off duty.
Some examples of eligible uniform expenses may include:
- Those not replacing a regular clothing item, such as an insignia or epaulets
- A reservist uniform that cannot be worn outside of performing reserve duties
- Professional dues
- Uniform cleaning and maintenance
Travel and Lodging Deductions
Military service members may deduct unreimbursed travel expenses when they are “away from home” or their permanent duty station. You are considered “away from home” when you are away from your permanent duty station for longer than an ordinary day’s work.
Eligible expenses may include meals, lodging, laundry and business-related phone calls. However, expenses related to personal travel or overseas travel when stationed in the country are generally not tax deductible.
Members of a reserve component of the Armed Forces may also be able to deduct their unreimbursed travel expenses upon their return, provided they travel more than 100 miles away from home in connection with their services as a member of the reserves. This can result in a more generous income adjustment compared to a similar itemized tax deduction.
Some service members may be able to deduct expenses related to work-related education. To qualify for a tax deduction, the education must meet certain criteria:
- The education was required by law or by your employer
- The purpose of the education was to maintain your salary, status or job position
- Your employer has a bona fide purpose for the education
- The education helps to maintain or improve necessary skills for your current work duty
In some situations, travel and other expenses related to obtaining eligible education may also be deductible. Education-related deductions do not apply to education obtained to meet minimum job requirements or used to learn a new trade or profession.
Military Tax Filing Tips
Aside from tax deductions, write-offs, rebates or other forms of tax breaks, there are additional tax-related resources available to Veterans and active service members.
Here are four tips to take advantage of these resources when filing your taxes:
1. Familiarize Yourself With Other Military Tax Benefits
In addition to deductions, service members should be aware of other military tax benefits available to them. You may be eligible for benefits such as exclusionary pay, tax liability forgiveness, penalty-free retirement deductions, earned income tax credits and deadline extensions when filing your taxes.
Familiarizing yourself with these benefits can help reduce your tax liability, maximize your tax savings or provide more time to file your taxes.
2. Know What is Not Eligible for a Tax Deduction
While military members can benefit from various tax deductions, not all military-related expenses are tax-deductible. For example, you cannot claim the cost of haircuts on your taxes, even if they are related to your military duty requirements.
Understanding what expenses are not eligible for deductions can save you time and frustration during the tax filing process.
3. Use Military-Specific Tax Filing Resources
The Department of Defense offers a free tax filing software called MilTax, tailored exclusively for military service members. MilTax offers tax preparation and electronic filing software with no income limits, personalized support from experienced tax consultants with military expertise and up-to-date information on tax filing.
MilTax is ideal for individuals with tax situations unique to military service, such as deployments, combat and training pay, housing and rentals and multi-state tax filings. Eligible service members can use this platform to electronically file their federal tax returns and up to three state tax returns for free.
4. Consider Free Tax Return Preparation
Some Veterans or military service members may qualify for free tax return preparation through the IRS Volunteer Income Tax Assistance program. This program offers assistance from trained volunteers who can help you complete your tax return at no cost.
The Bottom Line
Military tax deductions and write-offs can provide significant financial relief to eligible service members. By understanding the available benefits and resources and taking advantage of our tax filing tips, service members can maximize tax savings and reduce the financial stress associated with a military lifestyle.
Check out our guide to preparing your taxes to get a head start on the filing process!