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News | Jan. 28, 2019

Tax Season: What You Need to Know

By Navy JAG Corps Public Affairs

Volunteer Income Tax Assistance (VITA) and Free-File Options

What can the Naval Legal Service Command (NLSC) VITA program do for me? The NLSC’s VITA program hosts self-service VITA tax centers at select Region Legal Service Office (RLSO) locations that assist 10 U.S.C. § 1044-eligible filers, including active-duty and retired Service Members, their dependents, and deployed civilians to electronically file their own taxes via militaryonesource.mil. What if I cannot visit a VITA tax center to file my taxes? All eligible filers can access the very same militaryonesource.mil online tax preparation and filing software used at VITA centers from home or on the go and file their taxes whenever and wherever they are most comfortable. Military OneSource 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 for free.  Visit jag.navy.mil and militaryonesource.mil for more tax filing information. Am I eligible for VITA or the Military OneSource filing software? Unless otherwise limited by specific RLSO VITA tax centers, active duty, reservists on active duty, dependents and retirees are eligible for VITA. Overseas civilian GS employees are eligible for VITA services.  Please note that retirees will be directed to one of the many free file alliance software programs (see www.irs.gov) because retirees do not qualify for Military OneSource. In most instances, retiree’s wishing to use these services for free must have an adjusted gross income (AGI) of no more than between $55,000 and $66,000 for the given tax year.  However, because each program has unique requirements retirees are urged to review the above link to select the most appropriate free file alliance vendor.  If a retiree’s AGI exceeds the amount required for free filing, online tax preparation vendors may require the retiree to pay a user fee. Where is my nearest VITA tax center? Look for VITA tax center announcements in base newspapers, articles in command plans of the week, and group e-mail messages to command members. Customers eligible for VITA under 10 U.S.C. § 1044 can also locate the nearest RLSO at jag.navy.mil. Tax Filing, Deadlines, and Extensions  When should I file my taxes? Tax season begins January 28, 2019. The deadline to file depends on whether the filer resides in the United States or overseas. CONUS v. OCONUS.  Resident aliens and U.S. citizens residing within the United States must file by Monday, April 15, 2019.  U.S. citizens and resident aliens residing overseas as well as Service Members serving outside the U.S. are allowed an automatic two-month extension to file returns and pay taxes without requesting an extension. Because certain penalties and interest can accrue, it is strongly recommended that you consult the IRS rules here: Overseas Two Month Extensions.  For filing deadline information see IRS Filing Deadlines.  What items or documents should I have on hand when preparing my taxes? To prepare and file taxes, taxpayers typically need to have on hand 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 if I cannot file before the deadline? Taxpayers unable to file before the deadline may request a 6-month extension from the IRS.  Extension requests must be made prior to the original filing deadline.  Filers can request an additional extension as well, if necessary. Note.  Extensions to file returns do not grant an extension of time to pay your taxes.  Despite any filing extension, requestors will still be charged and owe interest on any unpaid tax amount from the original due date.  See Filing Extensions for more information. Can I get a filing extension if I served in a combat zone? Active duty members and civilian support personnel serving the U.S. Armed Forces in specifically designated combat zones are entitled to an automatic extension of 180 days from the last date the taxpayer actually serves in a combat zone.  For details on combat zone filing extensions, visit Combat Zone Extensions. Special Considerations  What recent tax laws or benefits should Service Members be aware of before filing? Spouses of Service Members.  Newly enacted legislation under the Servicemembers Civil Relief Act (SCRA) expanded tax rights of spouses of Service Members.  Section 302 of the Veterans Benefits and Transition Act of 2018 now allows spouses of Service Members to file taxes in any state in which their Service Member spouse previously established legal residence during any taxable year of the marriage.  Spouses of Service Members may exercise this right even if they never personally established a physical presence in or had any other connection to the state they wish to file in. Affordable Care Act.  The Affordable Care Act requires Americans to maintain a minimum level of health insurance. The majority of Tricare programs elected by Service Members and their dependents qualify for the minimum requirement. The Department of Defense, via DFAS has issued the mandatory form 1095 that details the type of health insurance provided to all its employees. Your IRS Form 1095 is in your myPay account! DFAS provides 1095B or 1095C forms confirming “essential healthcare coverage” for Tricare policyholders. Whether you opted out of electronic delivery for these forms, they are available now via your myPay account.  The IRS 1095 series forms include information already provided to the IRS. 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 that their limited coverage does not meet the minimum requirement. Tricare Plus users who combine their coverage with Tricare Standard or Tricare For Life meet the minimum coverage requirements. For more information, please visit Tricare Coverage. What common misconceptions exist for Service Members serving overseas or in combat zones?  Overseas.  Service Members overseas are often not aware that the Foreign Income Tax Exclusion applies when their spouse works in the local economy overseas. Combat Zone.  Common misconceptions for Service Members serving in combat zones 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.
Are there any tax breaks or filing extensions for Service Members deployed overseas? In addition to the filing extension for active duty mentioned above, enlisted Service Members 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 entire 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. Are spouses of deployed Service Members able to use a power of attorney to file on behalf of the deployed military member? Yes. The spouse must use the IRS Form 2848 which does not need to be signed in the presence of a notary. The form can be obtained from the local Region Legal Service Office or by visiting  www.irs.gov to download Form 2848.  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.
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