Military OneSource's MilTax forum opened for business Jan. 19 as the IRS began accepting tax returns, said an official with Defense Department Military Community and Family Policy.
Kelly Smith, program analyst with MC&FP, said the biggest factor DOD wants its service members and their families to know is that MilTax is an option for them when they're considering how to file for this tax season; the deadline is April 18.
To reach MilTax, go to MilTax: Free Military Tax Return Preparation Services • Military OneSource, or call 800-342-9647.
"We know there are many other tax products out there, but MilTax is 100% free of charge [without] rank or pay restrictions," Smith said. Service members are entitled to the tax-filing benefit they've earned and can use MilTax's filing software and consult with a MilTax consultant even if they have just a question. The MilTax consultants are well-versed in military-specific tax situations, she said, noting that MilTax results are guaranteed.
For example, the Military Spouse Residency Relief Act is an issue that comes up quite often, Smith said. "There are rules that military spouses need to know when it comes to filing their taxes, and there are some eligibility requirements [under the MSRRA], and it applies when a spouse lives in a state different from his or her residency state."
Because military families move often, there are certain qualifying military moving expenses that can apply to filing taxes, she said. One qualifier involves moving household goods and personal effects, and the other is reasonable travel and lodging expenses, she added.
And particularly applicable to spouses is self-employment, otherwise known as working in the gig community, Smith said. Operating a small self-business requires a Schedule C tax form, she added.
The Child Tax Credit can also come into play for 2021 tax filing, Smith said. According to Military OneSource, the child tax credit maximum amount of credit is $2,000 per qualifying child and is refundable up to $1,400. The bill also includes a temporary $500 nonrefundable credit for other qualifying dependents.
As part of the American Rescue Plan to help Americans recover financially from the COVID-19 pandemic, the 2021 child tax credit was expanded to $3,600 for children ages 5 and younger, and $3,000 for children ages 6-17. Eligible taxpayers will receive monthly payments totaling half of their 2021 child tax credit from July 15, 2021, through the end of the year. Taxpayers can claim the other half when they file their 2021 tax returns. For more, visit Advance Child Tax Credit 2021 • Military OneSource.
For those who are deployed overseas during the tax season and need an extension to file, Smith said DOD wants its service members to focus on their mission and not worry about filing tax forms. The IRS automatically extends tax deadlines for U.S. Armed Forces personnel deployed to a combat zone or in support of operations in a qualified hazardous duty area. More information on tax extensions can be found at: Filing Military Taxes While You Are Deployed.