Free Tax Filing for Veterans
Posted in Uncategorized on February 6, 2018
As tax season kicks off, you’re probably starting to think about how you are going to file, what documents you will need and what kind of tax refund you could potentially see. Members of the military and veterans often face a more complicated process, handling unique elements such as combat pay, deployment, disability payments and multi-state filing.
The good news is that for military members and veterans, you are not only eligible for free tax preparation assistance, but many providers now offer a specialized understanding of military and veteran life.
Tax Filing for Veterans
In 2015, the U.S. Department of Veterans Affairs (VA) and the Internal Revenue Service (IRS) entered into a “Memorandum of Understanding” aimed at ensuring that military members and veterans receive free tax preparation services. Subsequently, there are numerous ways that you can access services, both in-person and online, to make the most of this benefit.
Documents to Collect
Before you get started, you’ll want to make sure you have gathered all the required documents.
It’s always a good idea to check ahead with the service you are using about all potential documents and records you will need, but a good starting list includes:
- Childcare costs
- Earning statements (Forms W-2, W-2G, 1099-R; most are available on MyPay)
- Investment income forms
- Last year’s returns
- Military ID/Photo ID
- Receipts for charitable donations
- Receipts for expenses you can “write off”
- Social security numbers for each family member claimed
- Your bank account and routing numbers for direct deposit
- See a full list of what to bring, recommended by the IRS
Once you’ve gathered these documents, you should decide which avenue of filing is best for you. While the IRS maintains that filing online is the most accurate and secure way to proceed (and combined with direct deposit, the fastest way to get your return), there are numerous options available to veterans and military members.
On-Base Tax Centers
Many military installations and numerous community locations offer free tax preparation assistance through the IRS’ Volunteer Income Tax Assistance (VITA) program. VITA is primarily aimed at assisting families that make $54,000 or less, as well as people with disabilities.
Additionally, the IRS provides free tax counseling services for people over the age of 60 through its Tax Counseling for the Elderly program. For both programs, the IRS trains and certifies local volunteers and organizations to ensure they are experts in filing, and also provides free electronic e-filing services. More than 950,000 free tax returns have been prepared for veterans since the 2015 at nearly 8,000 free tax preparation sites across the country.
Online Services and Tools
Military members and veterans can leverage numerous free online tools to file their income taxes, including:
- IRS FreeFile: If you earn $66,000 or less, you are eligible for free name-brand filing software. If you earn more, you can still take advantage of free “file fillable” forms.
- Military OneSource MilTax: Provided by the Department of Defense, this e-filing software walks you through a series of questions to help you complete your tax return, with a special understanding of military life (including combat pay, deployment and multi-state filing). Calculations are 100% accurate as guaranteed by the software provider.
- Turbo Tax Military Edition: Service members with pay grades of E1-E5 can get the software for free, while pay grades of E6 and above can get the software at a discounted price.
Remember These Deductions
Military members and veterans have numerous potential deductions and exceptions not available to civilians, so it’s important to be aware so you are not missing out on any portion of your refund.
- Combat-Injured Veterans: Under federal law, Veterans who suffer combat-related injuries and who are separated from the military are not to be taxed on the one-time lump sum disability severance payment they receive from the DoD. You may be eligible for a refund. You may also be eligible for additional exemptions if your disability rating has increased over the year.
- Filing Extensions: If you are deployed to a combat zone, you are eligible for a filing extension.
- Military Family Tax Relief: Includes numerous deductions for active duty and Guard/Reserve, including homeowner assistance, death benefits, dependent care, military academy attendance and the sale of a primary residence.
- Tax Exclusion for Combat Service: Numerous exclusions if you are serving or served in a combat zone during the previous year.
- VA Disability Benefits: Disability benefits and payments (including grants for accessibility updates to home and vehicle, and certain dependent care assistance) received from the VA should not be included in your gross income. Review the IRS’ list of Frequently Asked Questions for Disabled Veterans.
For more military-specific resources, visit the IRS military page.