Several tax law changes could significantly affect how
service members and their families file their 2015 income tax returns.
“It’s probably the biggest set of changes in many years”
said Army Lt. Col. Samuel W. Kan, executive director of the Department of
Defense’s Armed Forces Tax Council, which oversees the military’s Volunteer
Income Tax Assistance program.
For example, this is the first year service members received
an IRS Form 1095-C, which documents their 2015 minimum essential health care
coverage and shows their compliance with the Affordable Care Act.
“People haven’t seen these forms before,” Kan said, adding
that service members must keep the 1095-C with their tax records, and bring it
with them if they use a tax preparer.
Service members who entered or left the military in 2015 or
had other life-changing circumstances that created a health care coverage lapse
have an issue that must be addressed with a tax preparer, he added. Those
members might have multiple 1095s, depending on their individual
circumstances.
Taxpayers without minimum essential health care can incur
IRS penalties, Kan said. In addition, taxpayers who enrolled in the Health
Insurance Marketplace and had advance payments of the Premium Tax Credit paid
directly to insurance companies on their behalf, such as members who worked in
the civilian sector and then joined the military in the middle of the year,
will need to file their tax return to reconcile those advance payments.
Service members should be aware that certain “tax extenders”
– once temporary measures to stimulate the economy – have become permanent, Kan
said.
Some of those important permanent changes include the state
and local general sales tax deduction, especially for those members from states
without a state income tax, the educator expense deduction for members who
teach and incur expenses, and the American Opportunity Tax Credit, for members
with college expenses, he said.
Many resources exist for service members to file their 2015
tax returns, whether they are stateside or deployed, Kan said.
The online IRS Publication 3, the Armed Forces Tax Guide,
addresses a wide range of issues that might affect members of the military, Kan
said. In addition, state tax guides will soon be available through Military
OneSource, installation tax centers and legal assistance offices.
Visit a tax center and learn what documents to bring to a
tax preparer before scheduling an appointment, Kan advised, adding that it’s
essential to bring last year’s income tax return to ensure that members get all
the tax benefits to which they may be entitled.
Free tax-filing and preparation assistance for service
members is available in a variety of ways, he said. First, “brick-and-mortar”
tax centers on installations educate military members, while VITA certified tax
preparers accurately prepare and file the member’s income tax returns while
they wait. Legal assistance offices also can give advice on other tax services
provided at nearby installations, even though they may be operated by other
armed services, Kan said.
Second, Military OneSource tax kiosks are available at some
installation tax centers and offer self-service computers so service members
can prepare and file their own tax returns, assisted by VITA certified tax
preparers who are onsite to help.
Third, members can use Military OneSource from home,
assuming they are filing very simple tax returns without such deductions such
as passive loss carryovers on rental property, he noted. Service members who
want to use Military OneSource from home should be sure to read the
instructions before starting a return to make sure they don’t waste their time
by starting a return and then realizing that the return cannot be properly
prepared, Kan noted.
Although service members can prepare their own tax returns
and do the necessary research by using search engines and the IRS web site, Kan
said, due to the many changes in this year’s tax code, self-filers should show their
returns to an tax preparation expert at an installation tax center to make sure
they haven’t missed any benefit to which they are entitled. Few things are worse than leaving your own
money on the table, he added.
At Joint Base San Antonio-Randolph, appointments for the
Military Tax Assistance Center can made at 652-1040.