Income Tax Frequently Asked Questions

From Office of the Judge Advocate General of the Navy Public Affairs When does tax season start and end? Persons residing within the United States: The tax season begins Jan. 29. […]

From Office of the Judge Advocate General of the Navy Public Affairs

When does tax season start and end?

Persons residing within the United States: The tax season begins Jan. 29. For resident aliens and U.S. citizens residing within the United States, the filing deadline to submit 2017 tax returns is Tuesday, April 17, 2018, rather than the traditional April 15 date. Washington, D.C., will celebrate Emancipation Day on that Monday, which pushes the deadline to the next day for most of the nation.

Persons residing within the United States can request a 6-month extension. You can request an additional extension to file no later than Oct. 15, 2018, by filing IRS Form 4868. However, this extension does not eliminate any penalties for paying late which are assessed from the original due date of your return (April 17 for calendar year taxpayers). Also, be aware that despite the extension to file you will still be charged and owe interest on any unpaid tax amount from the original due date of the return.

Persons residing outside the United States (OCONUS): If you are a U.S. citizen or resident alien residing overseas, or are in the military on duty outside the U.S., on the regular due date of your return, you are allowed an automatic two-month extension to file your return and pay any amount due without requesting an extension. For a calendar year return, the automatic two-month extension is to June 15. If you qualify for this two-month extension, penalties for paying any tax late are assessed from the two-month extended due date of the payment (June 15 for calendar year taxpayers). If you qualify for the 6-month extension described above, you will have to pay interest on any tax not paid by April 17. OCONUS filers who are unable to file their return by the extension due date (June 15), may request an additional extension by filing IRS Form 4868 by June 15, 2018. While penalties for paying any tax late will be assessed from the extended due date of the payment (June 15 for calendar year taxpayers) be aware that despite the extension to file you will still be charged and owe interest on any unpaid tax amount from the original due date of the return.

Persons serving in a combat zone: Active duty members and civilian support personnel acting under the direction of the U.S. Armed Forces in support of those military operations in combat zones are entitled to an automatic extension of 180 days from the last date that the member or civilian support personnel is actually serving in a combat zone. Civilian taxpayers covered by the combat zone provision should put the words “COMBAT ZONE” and their deployment date in red at the top of their tax returns. Members of the military do not need to write “COMBAT ZONE” and their deployment date on the tops of their tax returns because the U.S. Department of Defense informs the IRS about members in the combat zone. Combat zone extensions also apply to spouses, regardless of whether they are filing jointly or separately. There are only two exceptions where this would not be the case: 1) if the taxpayer in the combat zone is in the United States as a result of injuries sustained while serving in the combat zone, the combat zone extensions would not apply to their spouse; and 2) the deadline extension provisions for a spouse do not apply for any tax year beginning more than two years after the date of the termination of the combat zone designation.

Taxpayers qualifying for such combat zone relief may also notify the IRS directly of their status through a special e-mail address: combatzone@irs.gov. They should provide name, stateside address, date of birth and date of deployment to the combat zone. They should not include any social security numbers in an e-mail. This notification may be made by the taxpayer, spouse, or authorized agent or representative.

Are there any new tax laws or benefits this year that Servicemembers should be aware of before filing their taxes?

The Affordable Care Act requires that all Americans maintain a minimum level of health insurance. The majority of Tricare programs elected by Servicemembers and their dependents qualify for the minimum required level of health insurance. The Department of Defense, via DFAS has issued the mandatory form 1095-C that details the type of health insurance provided to its employees. Your IRS Form 1095 is in your myPay account! Starting this year, DFAS is providing 1095B or 1095C forms confirming “essential healthcare coverage” for Tricare policy holders. Federal Employees Health Benefits (FEHB) Program customers receive their 1095C from DFAS as well. Whether you opted out of electronic delivery for these forms, they’re available now via your myPay account 24 hours a day, seven days a week. The IRS 1095 series forms include information already provided to the Internal Revenue Service. These 1095 forms contain information you need to complete your individual federal income tax return.

Some Tricare Plus/direct care, line-of-duty care, and transitional care users might find their limited coverage does not meet the minimum essential coverage. Tricare Plus users who combine their coverage with Tricare Standard or Tricare For Life do meet the minimum coverage requirements. For more information, please visit: http://www.tricare.mil/ACA.

Are there ways in which it would be more beneficial for military members to pay for services offered by places such as H&R Block versus using free services offered through the VITA program?

Military members, reservists, and their dependents can access the H&R Block software at no cost through Military OneSource (MOS). The Department of Defense has partnered with MOS to provide this free service to all active duty Servicemembers, reservists, and their dependents. Signing up for MOS is simple and can be done from the comfort of home without having to travel to a military VITA site. MOS also provides personal tax assistance over the phone from trained tax consultants seven days a week from 0700 to 2300. Qualifying customers can file their federal return and up to three state returns at absolutely no cost.

The service provided by MOS eliminates the need for any Servicemember to have to pay anything to have their tax return processed.

How would someone go about contacting their nearest VITA representative?

VITA tax centers publicize the program by using base newspapers, articles in command plans of the week, and group e-mail messages to command members. For more information on the VITA program, contact your local Region Legal Service Office to find the closest branch office.

When does the VITA program open and for how long does it run?

Most VITA programs start within a week or two after Jan. 25. They continue operating until the end of the tax season, which is April 17 within most of the United States or June 15 outside the United States.

Who staffs it and what training do they receive?

VITA is staffed by volunteers, limited duty personnel, and personnel sent TAD from their host commands. They are trained using the IRS’s “Link and Learn” software and are required to pass competency tests to qualify to serve in a Navy VITA center.

Who is eligible to use VITA?

Active duty, reservists on active duty, dependents and retirees are eligible. Overseas civilian GS employees are eligible for VITA services.

Please note that retirees do not qualify for Military OneSource; however, retirees can file their taxes using one of 13 free file alliance software programs which are explained at  www.irs.gov. In most instances, the retiree’s adjusted gross income (AGI) is less than $62,000. However, because each program has unique requirements the retiree is urged to check the above link to select the most appropriate vendor.  If a retiree’s AGI is over $62,000, online tax preparation vendors might require them to pay a user fee that is outside the control of the Navy VITA site.

What are the most typical items or documents Servicemembers will be required to have in order to have their tax returns prepared?

Income and interest statements, Social Security Numbers (SSNs) and Dates of Birth (DOBs) for all family members, Employee Identification Number (EIN) for child care providers, and bank routing and account numbers.

What are some of the most common misconceptions and tax filing mistakes for military personnel serving in combat zones?

 The most common mistakes are:

  • Thinking you need to file an extension (Form 8809);
  • Thinking an extension of time to file is an extension to pay any tax owed; and
  • Thinking that since military pay is nontaxable, all other income and interest must also be nontaxable.

What types of tax breaks or filing extensions are in place for Servicemembers who are deployed overseas?

 In addition to the filing extension for active duty mentioned in the answer to question 1, enlisted Servicemembers or warrant officers (including commissioned warrant officers) who serve in a combat zone for any part of a month, can exclude military pay received for that month from their gross income. For commissioned officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received.

Enlisted members who reenlist early in the combat zone, even if they receive their reenlistment bonus several months later when stationed outside the combat zone, are entitled to exclude the whole reenlistment bonus from gross income because they completed the necessary action for entitlement to the reenlistment bonus in a month during which they were serving in the combat zone.

What is one of the most common tax filing mistakes for personnel deployed overseas?

Not being aware that the Foreign Income Tax Exclusion applies if your spouse works in the local economy overseas.

Are spouses of deployed Servicemembers able to use a power of attorney to file on behalf of the deployed military member?

Yes. The spouse must use a special power of attorney which does not need to be signed in the presence of a notary. The spouse can get one from their local Region Legal Service Office or the spouse can go to www.irs.gov to download Form 2848.

How much money did VITA save Servicemembers last year?

The cost of filing taxes for an average tax payer is $261. The VITA program is completely free for eligible filers for both state and federal taxes.

What should Sailors do to help ensure their taxes are done correctly? Why is it important that they do them correctly?

  • Check DOB and SSN for family members carefully. That is the biggest reason for rejected returns. Double check the bank routing and account numbers.
  • For recently married persons, check the name on your Social Security cards. Use your maiden name unless you have already changed your name with the Social Security Administration.
  • For those with longer or hyphenated names, check the Social Security card. Your name must exactly match what is on the card.
  • For single parents, make sure that you know who is authorized to claim the child for tax purposes.
  • The biggest credits for enlisted are usually the Child Tax Credit, the Earned Income Tax Credit, the Child and Dependent Care Credit, and the Lifetime Learning Credit.