Tax Implications for Deployed Military

Hey everyone, I'm considering joining the military after high school and was wondering if someone could break down the impact on taxes for those who are deployed? I've come across terms like 'military deployment tax exemption' and 'tax deferment for deployed military' but I'm a little confused. Would appreciate any clarification!

Hello! I'm glad to see you're thinking ahead about these possible scenarios. Being in the military does indeed have certain implications for your taxes, particularly when you are deployed.

The 'military deployment tax exemption' is a federally mandated protection under the combat zone tax exclusion provisions of Section 112 of the IRS Code. What this means is that if you serve in a region that has been recognized by the U.S. government as a combat zone, then your military pay for the period of service in that combat zone is exempt from federal income tax.

As for the 'tax deferment for deployed military', if you're serving in a combat zone (or have hospitalization due to wounds, disease, or injury incurred while serving in the combat zone), the Internal Revenue Service (IRS) can defer your tax payments. If eligible, you may be granted an extension of time for actions with respect to the IRS, such as filing tax returns, paying taxes, filing a claim for refund, or bringing suit for a refund. The deadline is extended for at least 180 days after:

- The last day you're in a combat zone or the last day the area qualifies as a combat zone, or

- The last day of any continuous qualified hospitalization for injury from service in the combat zone.

The tax laws surrounding military service can be quite complex, especially when deployment is involved. Always consult with a tax professional or military legal services for advice tailored to your specific situation. Specialists in military tax issues can help understand the ins-and-outs of these rules and make sure you claim all the benefits to which you're entitled.