How to benefit from IRS tax breaks for active duty military

You're serving your country on active military duty in a combat zone; the least you deserve is a tax break back at home.

And you've got it.

If you are on active military duty as part of the U.S. Armed Forces serving in a combat zone, special tax provisions, designed just for active military like you, includes extensions for filing tax returns and paying taxes, exclusion of some military pay from taxes, and more.

The Internal Revenue Service has a new section on its web site containing important information to help ensure that as active military of the U.S. Armed Forces serving in a combat zone, you get the maximum tax benefits you're entitled to.

As active military, some of your pay is tax-exempt. Generally, military enlistees up to warrant officers (including commissioned warrant officers) can exclude all their military pay received for military service in a combat zone from the tax man. 

For commissioned officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received. For 2002, this limit was $5,532.90 and for 2003, $5,882.70. Amounts excluded from gross income are not subject to federal income tax.

As active military, you've got more time. The IRS automatically extends the deadline for filing tax returns, paying taxes, filing claims for refund and taking other actions related to federal income tax for U.S. Armed Forces personnel serving in a combat zone. The IRS also extends the deadline for those in the U.S. Armed Forces deployed overseas away from their permanent duty station in support of operations in a qualified hazardous duty area, but who are outside that area. 

The deadline for filing returns, making payments or taking any other action with the IRS is extended for at least 180 days after:

• The last day of qualifying combat zone service, or
• The last day of any continuous qualified hospitalization for injury from the combat zone.

The IRS is currently working with the military to obtain information about reservists and regular military personnel serving in combat areas. During this interim period, combat duty military, their spouses or their authorized representatives, have options for tax filing extensions or filing exclusions:

• When filing returns, mark "Combat Zone" at the top of the form along with the date of deployment.
• Contact the IRS through the special e-mail address at IRS.gov. Correspondence should include the name, stateside address, date of birth, and date of deployment of the service member. (No Social Security numbers should be included in the e-mail.) The IRS emphasizes only military-related e-mails should go to this address. Calls can also be made to the main IRS help line at 800-829-1040.

Know your tax benefits. And know that when you're on active duty, the US government IRS office is actively supporting the success of your military money management.