Military Financial Advice - Army Times

Essential intel: Links to military tax info

One of the most critical documents you need at tax time is your W2 form, which you include with your tax documents when you file. Like Leave and Earnings Statements, service members’ W2 forms are available only in electronic format. You can find your W2 form on the Defense Finance and Accounting Service’s myPay system.

The Web site of the Internal Revenue Service contains all the publications, instructions and forms you will need. Below are some of the most useful links, plus some IRS publications — in PDF format — that you can download here.

• Military-specific tax information. This section of the IRS Web site has info on issues ranging from new IRA rules for service members to details on provisions relating to combat-zone service.

• Combat-zone tax provisions. You’ll find guidance here on tax relief provided to military members serving in combat zones — from tax-free pay to deadline extensions — written in a question-and-answer format.

• Deadline extension e-mail. If you need to request a filing extension because you’re deployed to a combat zone, you can do so by sending an e-mail to the IRS. Find out how here.

• Using the Earned Income Tax Credit. The maximum amount you can earn and still rate this credit increased in 2006. This is a tricky credit to use, though, particularly if part of your pay was earned in a combat zone and was not taxed.

• Free tax return service. Tax assistance is offered on most military installations through the Volunteer Income Tax Assistance program. Find out how to locate a VITA site near you.

• New rules for reservists’ retirement accounts. Reservists called to active duty can now receive payments from an IRA, 401(k) plan or 403(b) tax-sheltered annuity without having to pay early-distribution taxes. Find out more about the Pension Protection Act of 2006, which eliminates the 10-percent tax that normally applies to early distributions.

• Tax-free pay and IRAs. Under the Heroes Earned Retirement Opportunities Act of 2006, troops can now count tax-free combat pay when determining whether they can contribute to either a Roth or traditional IRA.

• Electronic filing through the IRS. Find out how to file your tax return electronically through e-file or freefile.