How to File Taxes in the Military While Deployed

Military deployment brings unique opportunities for tax filing. Servicemembers have access to special extensions and potential tax breaks that could potentially ensure a smooth process. Whether you’re filing individually or jointly with a spouse, being prepared helps you meet deadlines and take advantage of available benefits. Here’s what you need to know to manage your taxes during deployment.

Understanding your military tax filing options

Filing taxes during deployment is easier than it seems. Even when you’re far from home, you can access most of your important tax information online. Your basic filing requirements also stay the same, but the way you submit your return and the timeframes for doing so may differ. 

Option 1: Filing yourself while deployed

Many deployed Servicemembers choose to file their taxes themselves. With internet access, you can e-file from almost anywhere in the world. Use tax preparation software like MilTax or IRS Free File, gather your digital documents and file early if possible. This approach can give you direct control over the process.

Option 2: Using power of attorney

If you’ve designated someone with financial power of attorney (POA) before deployment, they can handle your taxes completely while you’re away. Your trusted POA can access your documents, complete forms, sign on your behalf, submit information to the IRS and handle any follow-up communications. 

Option 3: Spouse filing options

Filing jointly with your spouse is also one of your options during deployment. For overseas Active Duty, your spouse can prepare the return and either send it to you for your signature or sign on your behalf with POA. During combat zone deployment, your spouse can sign without POA by attaching a statement noting your service location. 

Option 4: Working with a tax preparer

Tax preparers can give Servicemember taxpayers expert guidance tailored to military situations. Many of these professionals offer remote services for deployed members. Look for those with military tax experience who understand combat pay exclusions, deployment-related deductions and state tax complexities.

Planning for taxes: What you need before military deployment

Preparing for tax season before you deploy can save time and reduce stress. Start by making sure you have digital access to your financial accounts and tax documents. Gather these important items:

• Your military W-2 (set up myPay access)
• Any 1099 forms for additional income
• Last year’s tax return for reference
• Receipts for potential deductions (childcare, charitable donations, etc.)
• Investment and property income information
• Social Security numbers for you and your dependents
• Bank account and routing numbers for direct deposit

Tax forms for military members

When filing taxes during deployment, members of the military need to be familiar with specific forms beyond their W-2. Here are the key tax forms that military members should be familiar with.

Tax extensions for military deployment

As a Servicemember, you have special tax filing extensions available to you. These extensions can give you extra time when deployment makes meeting standard deadlines difficult:

• Automatic extensions: When you’re Active Duty outside the United States and Puerto Rico, you’ll automatically get two extra months to file. This moves your deadline from April 15 to June 15. To use this extension, attach a statement to your tax return explaining your service situation.
• Combat zone extensions: Serving in a combat zone or hazardous duty area? Your tax filing deadline extends for 180 days after you leave the combat zone. This same extension applies if you’re hospitalized from injuries sustained while serving in a combat zone.
• Combining extensions: You can combine different types of extensions if needed. For example, if you’re still deployed after your automatic two-month extension expires, you can request an additional extension by submitting IRS Form 4868. This gives you until October 15 to file.

Remember that while filing deadlines can be extended, payment deadlines work differently. If you owe taxes, interest starts accumulating from the original April 15 deadline, even with an extension. To avoid this, try to pay at least 90% of your estimated taxes by the standard April deadline.

Tax deductions, credits and allowances during deployment

Members of the armed forces follow specific income tax rules, which detail the various types of military pay and allowances included or excluded from gross income for federal tax purposes. Whether you receive training pay or are stationed in an active combat zone, these circumstances can impact your tax filing. 

Here are some special considerations Active Duty military members need to be aware of:

• Combat zone tax benefits: Combat pay is excluded from taxable income, potentially lowering your tax bill. This exclusion applies to the entire month, even if you’re in a combat zone for only one day of that month. 
• State tax considerations: You maintain legal residence in your home state regardless of where you’re stationed. Military spouses can also maintain their legal resident status even when relocating due to military orders. Some states don’t tax military pay at all, while others offer special exemptions for deployed Servicemembers. 
• Tax-free allowances: Many military allowances are tax-free, including Basic Housing Allowance (BAH), Basic Allowance for Subsistence (BAS), Overseas Housing Allowance (OHA) and Family Separation Allowance (FSA). These don’t need to be reported on your tax return. 
• Multiple income sources: Having rental properties, investments or other income requires careful planning. Consider whether filing jointly or separately makes the most sense for your specific situation. 
• Earned income tax credit: You can choose to include combat pay when calculating EITC eligibility, even though it’s normally excluded from taxable income. This option might increase your refund.

Free tax filing discounts and resources

The military community has access to valuable tax preparation resources designed specifically for Servicemembers. This includes free tax filing options exclusive to military personnel and their families. Check out these free and discounted services to make filing easier:

• Free tax preparation through the Volunteer Income Tax Assistance (VITA) program.
• The IRS Free File service for Servicemembers who meet income requirements.
• Many tax software companies offering free or discounted filing for military members.

Make filing easy with Navy Federal Credit Union

With proper planning, the right resources and support from Navy Federal, you can confidently manage your taxes while serving your country. We’re committed to supporting military members through every aspect of financial life, including tax season. 

As a Navy Federal member, you have access to special tax preparation benefits. Enlisted Active Duty and Reserve members can file federal and state returns through TurboTax® Online at no cost. Plus, all members receive a 25% discount on federal filing, regardless of duty status!

Whether you’re Active Duty, Reserve or a Veteran, we invite you to visit Navy Federal’s Tax Center to answer your questions about filing your taxes and maximizing your refund.