Military and Veteran Tax Tips: 2019

Posted in Uncategorized on March 5, 2019

It's spring, which means it's time to think about taxes. The April 15 tax filing deadline is quickly approaching and many people are anxious to see how the new tax code will affect their returns. For many military personnel, overall federal taxes will be reduced.Military and Veteran Tax Tips: 2019

Military and Veteran Tax Tips: 2019

Learn more about how the new tax law will affect military and veterans this year, by reading our tax tips for 2019:

1. A reduction in federal taxes for service members.

Military service members should expect to see a substantial reduction in their overall taxes in 2018. Army Lt. Col. David Dulaney, executive director of the Armed Forces Tax Council notes, “The good news is that most of our service members should see a substantial reduction in their overall taxes in 2018.” He goes on to cite three primary reasons for this reduction:

  • The new tax law includes reduced tax rates that result in an overall reduction of 3 points for most military families, compared to last year’s rates
  • There is an increased standard deduction which is now $24,000 for married couples filing jointly, $12,000 for single taxpayers and $18,000 for heads of household; double the deduction in 2017
  • There is also an increased child tax credit; now, those with dependent children will be able to claim a credit of $2,000 for each child, which is twice as much as last year

2. Changes in tax law for service members in 2019.

One of the biggest changes in the tax law for military families is the Veterans Benefits and Transition Act of 2018. The law is retroactive for 2018 for those who were married as of that year. It essentially allows spouses to use their sponsor’s state of legal residence for local and state taxes. This makes filing taxes easier because now families only need to file in one state and qualifies some families for a refund of those state taxes already paid.

Another change in the tax law involves moving expenses related to Permanent Change of Station moves. While the DoD covers most of the moving expenses, there are still unreimbursed expenses and those are deductible for service members. They are, however, no longer deductible for civilians.

Additionally, military members who served in the Sinai Peninsula are now eligible for combat zone tax exclusion dating from June 9, 2015. Taxpayers only have three years to file an amended tax return so any amendments need to be filed quickly for members who served in the Sinai Peninsula in 2015.

3. Lost itemized deductions for the military.

While most of the changes to the tax law are good for military personnel and veterans, there are two areas where deductions have been lost. First, those in the Reserves are no longer able to deduct expenses related to drill duty for 2018, unless they have traveled more than 100 miles to the duty location.

Additionally, Marines are no longer allowed to deduct for the care, tear and wear of their military uniforms. Because Marines are not allowed to wear their uniforms off-duty, they were allowed to take a specialized deduction previously. That deduction is no longer offered.

Written by Alissa Sauer

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