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Tax Tips for Military Personnel
Members of the military and their families may be eligible for special tax benefits.
Travel expenses can be deducted if they are unreimbursed and are incurred while traveling away from home. If you are a member of the U.S. Armed Forces on a permanent duty assignment, your home is considered your duty station. To be deductible, your travel expenses must be work related. You cannot deduct any expenses for personal travel, such as visits to family on leave. If you are a part of the Reserves, unreimbursed travel expenses for traveling more than 100 miles away from home to perform your reserve duties are eligible for deduction. You do not have to itemize deductions since eligible expenses are deducted as an adjustment to income. The standard mileage rate for 2010 is 50 cents (51 cents for 2011).
Uniform purchase cost and future upkeep deductibility depends on whether or not the uniform can be worn when off duty. If you are allowed to wear the uniform when you are off duty, you cannot deduct any cost. However, if the uniform is prohibited from being worn when off duty, you can deduct the cost associated with that particular uniform. The following are deductible:
-Military battle dress uniforms and utility uniforms that you cannot wear when off duty
-Articles not replacing regular clothing, including insignia of rank, corps devices, epaulets, aiguillettes and swords
Moving expenses have special rules that apply to active duty members of the U.S. Armed Forces and their surviving spouses who move because of a permanent change of station. Deductible expenses include unreimbursed costs of moving, travel, storing and insuring household goods and personal items.
Distributions from an IRA, 401(k), or 403(b) plans which were made after the date of the order or call to active duty and before the close of the active duty period are subject to special rules and may not be subject to the 10% penalty tax on early distributions. Such distributions are also eligible to be repaid to the plan if paid back within two years after active duty ends.
This article contains general tax information for taxpayers. Each tax situation may be different, so do not rely upon this information as your sole source of authority. Please seek professional advice for all tax situations. Tax professionals are experts who keep current on tax law changes. They can save you time and offer insight on how to use the tax breaks available to you. To find a professional tax preparer, look to NATP whose members subscribe to a strict code of ethics and standards of professional conduct (read them in the Press Room). To see NATP’s list of professionals in your area, visit www.natptax.com and click Find a Tax Pro.
Members of the National Association of Tax Professionals (NATP) work at offices that assist over 11 million taxpayers with tax preparation and planning. The average NATP member has been in the tax business for over 20 years and holds a tax/financial designation and/or a college degree. NATP has more than 20,000 members nationwide. Members include individual tax preparers, enrolled agents, certified public accountants, accountants, attorneys, and financial planners. As a nonprofit professional association, NATP serves professionals working in all areas of tax practice through professional tax education, tax research, and tax office supplies. The national headquarters, located in Appleton, WI, employs over 45 staff members. Learn more at www.natptax.com.
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Members of NATP work at offices that assist over 11 million tax payers with preparation and planning. NATP has more than 20,000 members. Members include tax preparers, enrolled agents, certified public accountants, attorneys, and financial planners.