How does deployment affect military tax returns?

Hello there! I'm a high school junior looking to go into the military after graduation. I've been hearing some talk about how deployment can affect your tax returns, but it's all a bit confusing for me. Can anyone explain how this works? For instance, are there any particular tax benefits/implications tied to being deployed? Appreciate any kind of help here.

Sure, happy to explain this for you! Those serving in the military, especially when deployed, often have unique circumstances that can impact their taxes. Here are a few things to consider:

1. Exclusion of Combat Pay: If you serve in an officially designated combat zone, your combat pay, also known as hostile fire or imminent danger pay, is partially or fully tax-free. The amount that can be excluded from taxable income for commissioned officers has some limitations, but for enlisted members and warrant officers, the exclusion often applies to all military pay earned while serving in the combat zone.

2. Deadline Extensions: Service members who are serving in a combat zone or a contingency operation, or who are stationed overseas, often qualify for deadline extensions for filing and paying taxes. These extensions can be 180 days plus the number of days that were left in the filing season when you entered the combat zone (April 15-June 15). For contingency operations, the extension is typically for 180 days after your last day in a contingency operation.

3. Earned Income Tax Credit (EITC): The EITC is a benefit for working people with low to moderate-income. If you have combat pay, you can choose whether to include it as earned income when you calculate your EITC. This allows military members to get the highest possible credit.

4. Moving Expenses: If you're a member of the Armed Forces on active duty and you move because of a permanent change of station, you might be able to deduct some of your unreimbursed moving costs.

Remember, everyone's tax situation is different, so it's always a good idea to consult with a tax professional who's familiar with military tax issues to ensure you're getting all the benefits you're entitled to. They could provide more specific advice based on your particular situation.