Top Military Tax Tips for Filing Your 2023 Taxes

Military members and their families can take advantage of several tax provisions, according to the 2022 version of Publication 3 from the Internal Revenue Service. Here are some top tips to consider before filing taxes.

Tax Filing and Deadlines

The deadline to file 2023 taxes is April 15, 2024. The IRS extends the deadline for filing a return if a military member is in a combat zone or has qualifying service outside of a combat zone. This also applies to service members who are participating in a contingency operation outside the United States away from their permanent duty station.

Free Tax Filing Services and Consultants

Military members and their families can get help at many installations through the Military Voluntary Income Tax Assistance program. The legal center on base should be able to confirm if this service is available at the installation.

Gross Income Exclusion and Deductions

Service members receive many types of pay and allowances. The IRS includes some of these in the gross-income calculation while excluding others from it.

Combat Zone Exclusion

The combat zone tax exclusion allows service members to exclude certain pay from gross income. Typically, the service member must earn the pay in a month that they served in a combat zone.

According to the IRS website, these types of pay include:

• Active-duty pay in a combat zone
• Imminent danger/hostile fire pay
• Military reenlistment bonus
• Accrued-leave pay
• Financial award payments for work suggestions, technical inventions or scientific achievements
• Student loan repayments

Miscellaneous Pay Allowances

According to the 2022 version of Publication 3, the IRS excludes a variety of pay allowances from income, including defense counseling, disability payments, group-term life insurance, professional education, Reserve Officers’ Training Corps education and subsistence, and survivor and retirement protection-plan premiums.

Living Allowances

According to IRS Publication 3, the government excludes BAH (basic allowance for housing), BAS (basic allowance for subsistence), international COLA (cost-of-living allowance) and OHA (overseas housing allowance) compensation from gross income.

Family Allowances

Military-family dependents receive some exclusions from gross income as well, including certain expenses for education, emergencies, evacuation and separation, according to Publication 3.

Moving Expenses

According to Publication 3, service members can exclude benefits received for the realignments and closures of military bases from their taxes. The same consideration covers payments for dislocation. 

Other types of unreimbursed moving expenses that Publication 3 lists as exclusions include item transportation or storage, trailer relocation and housing costs.

Death Gratuity

According to Publication 3, the IRS excludes any death gratuity paid to a survivor from gross income. Survivors can also deduct unreimbursed dependent travel and burial services.

In-Kind Military Benefits

The military provides many in-kind benefits, some of which service members do not need to file as gross income. According to Publication 3, these include:

• Dependent-care assistance program
• Legal assistance
• Medical/dental care
• Commissary/exchange discounts
• Space-available travel on government aircraft
• Uniforms furnished to enlisted personnel