Taxes while deployed in military - how does it work?

Hey, I've been contemplating potentially pursuing a military career after I graduate. One thing I'm not quite sure about yet is how tax works while deployed. Anyone got any insights?

Hi there! Taxes can get a bit complex while you're serving in the military, especially when deployed, but I'll try to break down the basics for you.

Firstly, servicemembers still must file federal income tax returns while they're on active duty, irrespective of where they serve. Your military pay while on active duty is considered taxable income by the IRS. However, there are some exclusions provided to military members that civilians wouldn't get.

For instance, if you're serving in a combat zone, your combat pay (this is the basic pay you receive while you're serving in a designated combat zone) is not taxable. In other words, if you spend any part of a month serving in a designated combat zone, your income for that month is excluded from taxation.

In addition to that, some allowance types such as Basic Allowance for Housing (BAH), Basic Allowance for Subsistence (BAS), and others are generally not considered taxable income.

While deployed, your income tax filing deadline can also be extended for the period of your overseas service plus 180 days. This gives you more time to submit your tax documents without stressing about deadlines while overseas.

Even though you're serving in the military, it's essential to check on state-specific military benefits, as they can vary widely. Some states don't tax military pay, while others may have specific exclusions for combat or hazardous duty pay.

Of course, tax laws can be intricate, and I would recommend consulting with a tax professional to provide guidance based on your individual circumstances. It's also worth noting that the military provides free tax preparation and filing services to its members, which can be a great resource.

I hope this provides some clarity on your question!