Do US Military Personnel Have to File Income Taxes While Deployed?
The question of whether US military personnel have to file income taxes when deployed can sometimes be confusing. Here, we clarify the tax obligations and details for US soldiers, sailors, airmen, and marines during their deployments.
Tax Exemptions for Deployed Soldiers
US army soldiers, as with other military personnel, generally have tax exemptions while deployed. However, these exemptions depend on the location and nature of the deployment:
tTax Exclusion Combat Zone: Those in combat zones like Kuwait, Iraq, Afghanistan, and certain other regions may be exempt from federal income tax. However, state taxes still apply, at the discretion of their home state. tNon-Combat Zones: Deployments in non-combat zones, such as Poland or Korea, do not provide tax exemptions. Soldiers in these areas must file and pay the full amount of taxes, including both federal and state taxes.Tax Filing Requirements
No matter the status of the deployment, military personnel must still file their taxes. The requirements are the same as for any other US citizen:
tTax Forms: Military personnel use the same tax forms as any other US resident, including the Form 1040. This form is used to report various types of income, such as salaries, dividends, and rental income. tW-2s: Unlike civilians, military personnel do not use the W-2 form. Instead, they receive a military W-2 (WAE-2) from their paymaster, which includes all necessary income information. tTax Extensions: Soldiers commonly receive an automatic extension for filing their taxes due to their deployment. This extension typically extends the filing deadline to 180 days after their return from deployment.Home of Record and State Taxes
A key factor in determining tax obligations is the concept of a home of record. This is the location where the soldier was living before joining the military:
tHome of Record: For tax purposes, the home of record is the state where the soldier lived before enlisting. Even if a soldier is deployed overseas, they continue to pay taxes to their home of record state. tExample: A soldier from Wisconsin who is deployed in Germany would still be subject to Wisconsin state taxes. This often results in extensive tax filings, as the soldier must account for income generated in multiple states. tExtensions for Filers: Servicemembers can apply for an automatic extension to file their taxes, particularly if they are serving in a combat zone or other duty overseas where electronic filing is possible.Conclusion
The obligations of filing income taxes for deployed soldiers are mainly about adjusting to a situation where they might be serving in non-tax-exempt areas or inexperienced with the transition to filing from a remote location. The IRS remains a constant in this process, requiring timely and accurate tax filings no matter the location.
To navigate the complexities of military tax obligations, it is highly recommended to consult a tax professional or the US military's Internal Revenue Service (IRS) Military Civilian Tax Assistance Center (TAC). This can ensure compliance and avoid tax penalties or audits.