Free Tax Support for Military Members

Joe Wallace

Tax season for military members is potentially stressful at the best of times. For those new to the military or new to doing their own taxes while serving, sorting out pay and benefits for tax filing purposes can feel overwhelming. Fortunately, there is help available for military members at tax time.

Some choose to pay a professional tax preparer to take all the paperwork, run the numbers, and file their taxes. But you don’t have to pay for tax help as a service member.  There are free tax preparation services for service members, including MilTax and Volunteer Income Tax Assistance options at military bases worldwide.

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Free Tax Prep for Military Members: VITA

The Department of Defense operates a program called VITA (Volunteer Income Tax Assistance) through the Armed Forces Tax Council. VITA provides tax support for military members and addresses duty-related tax issues, including combat zone tax credits, Earned Income Credit applications, and more. VITA is the “main IRS outreach” for military taxpayers.

VITA is typically offered at military bases, but it is not available at ALL installations. VITA provides a location lookup tool to help you find the nearest tax assistance under this program. VITA is typically an in-person operation, and the volunteer tax preparers are given tax prep training to address military-specific tax issues and more typical ones.

Preparing for Your VITA Visit

In order to be fully prepared for your session with a VITA tax prep volunteer, you will need to gather a number of documents, including a valid, unexpired photo ID plus Social Security cards for the taxpayer, spouse, and dependents, where applicable, and proof of foreign status when applying for an Individual Taxpayer Identification Number.

You will also need birth dates for primary and secondary earners and dependents on your tax return, and last year’s tax returns (state and federal.)

In cases where a taxpayer or family member does not have a Social Security Number, you can substitute an Individual Taxpayer Identification Number assignment letter. You should come prepared with your banking information, including account and routing numbers for Direct Deposit of your tax refund.

Volunteer Tax Assistance is typically intended for simple personal tax returns. If you itemize deductions, have a small business, or require more involved assistance, you may wish to hire a tax professional rather than relying on a volunteer. And your VITA volunteer may not be qualified to (in their VITA role) help on more complex tax matters like itemized deductions.

But if your basic issues involve whether or not your combat zone tax exclusion is counted in the tax year you’re filing in, or if you have questions about how other military pay or benefits affect your taxes, VITA can help.

If you got a reenlistment bonus in the current tax year, you might not know (at first) that the IRS considers this supplemental income and has taxed it (in past tax seasons) at a flat rate (22% in one tax season). Will that apply to your current income tax filing? That depends on how laws may have changed since last year or when you got your bonus. This is another area where using VITA can help you get the most from your tax filing.

Free Tax Prep for Military Members: MilTax

MilTax is a do-it-yourself military tax help option available through a free online tax prep and e-filing program on MilitaryOneSource.

MilTax helps you sort out unique military tax issues related to deployments, serving in an overseas location (combat zones and otherwise), the need to file income taxes in more than one state, and training pay issues.

The software is designed to help you complete and file your taxes electronically, but you can also get personalized assistance from “personalized tax consultants”. According to the MilitaryOneSource page on MilTax, “Both the tax software and expert consultations are free for active-duty service members, eligible family members, survivors, and recent veterans up to 365 days from their separation or retirement date.”

MilTax uses an online questionnaire to help you properly file both state and federal returns, and you may be asked questions about your most recent service and your status as an active duty, Guard, or Reserve member.

Using MilTax

To use MilTax, you must first create an account at Military OneSource, a DoD-funded website offering support for troops and their families. Once you have created an account, you can access MilTax software or get personal support by phone. MilTax e-filing software is offered to the public annually from mid-January until October.

Once registered, the official site says you can use MilTax to:

• Complete your tax return with military-optimized software
• Connect with a tax professional who can help you further if necessary
• File federal and state tax returns

You can use MilTax to get help with:

• Military Spouses Residency Relief Act
• Moving deductions
• Combat pay exclusions

MilitaryOneSource services are offered at no cost to:

• Active duty service members
• Active-duty immediate family members, including spouses, children, and “anyone who has legal responsibility for the service member’s children” National Guard and reserve service members and families
• Coast Guard members who are activated as part of the Department of the Navy under Title 10 authority, as well as their family members.
• Survivors
• Medically discharged service members and their immediate family members who are “currently enrolled in their service branch’s wounded warrior or seriously ill and injured program.”
• Retired service members and their immediate family members for 365 days after the end of their tour of service, retirement date, or discharge date.
• Discharged service members
• Designated Department of Defense expeditionary civilians and their families
• Military academy cadets are students enrolled in one of the service academies for the Army, Navy, or Air Force.

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More Free Tax Support for Military Members

The IRS Free File Program is another option; this public-private partnership between the federal government and private tax prep companies allows military members and/or those with qualifying income below a cap to file their taxes for free. You can visit IRS.gov for more information, but the 2 basic options are:

• Free “Guided” Tax Preparation is free online tax prep and electronic filing via an IRS partner provider’s website. Typically those who have an annual gross income below $73,000 at press time are eligible to file free federal tax returns using this service.
• Free Fillable Forms is the digital equivalent of an IRS 1040 form. This option assumes you have a better grasp of your own tax issues and you will need to follow the IRS instructions on the form for filing. Like the guided tax prep option above, your gross annual income must be below a cap, subject to change year to year. It’s not safe to assume last year’s tax rules apply this year unless you get specific guidance. Always check the current year’s tax filing guidelines before filing for the best results.

If You Choose to Pay a Tax Professional

There are some things to keep in mind if you choose a tax prep professional instead of free assistance for your taxes while serving in the military. One of the biggest issues? Getting burned by fine print fees that aren’t mentioned in a transparent way earlier in the process.

You may be offered a special deal by a tax pro who wants to attract more military customers, but beware of hidden fees in the fine print for the act of e-filing your taxes–which is NOT the same thing as being charged for the PREPARATION of those taxes. You may find a fee structure associated with some tax professionals that includes an offer of free or discounted prep but a service fee charged for other activities.

Should You Get A Refund Anticipation Check from a Tax Preparer?

If your tax preparer offers you a refund anticipation check, you may be able to pay for your tax prep services with the proceeds, but that does not mean you get your tax refund faster. 

Some services may offer you a Tax Refund Advance Loan, but you could be stuck paying fees and/or interest on a loan that you might not even ask for, knowing that IRS processing times for refunds are typically about 20 days or so. That may not be true in all cases, but for simpler tax filings some might choose to just wait out the IRS instead.

Shop Around for a Tax Professional

In the same way you would research any other professional service, such as a counselor, primary care provider, lawyer, or real estate agent, you should also research your tax prep expert.

Whether you use an individual or go through a large company, you’ll want to learn what the online reputation of your chosen service provider is before you commit to having them work on your state and federal tax filings. It never hurts to ask your tax professional questions, including how much experience they have in filing taxes for military members and their families.

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