If you’re headed off to basic training soon and have yet to file your taxes, you may have some pressing questions about what to do to make sure you stay in good standing with the IRS.
Fortunately, the U.S. Military, IRS, and Armed Forces Tax Council have put a great deal of thought into making sure your transition from civilian to military is as seamless as possible, and that includes the complicated world of tax filing. They provide tons of great tax resources at Military OneSource.
If you are currently on active duty or in the reserves and you’ve like to know more about where and how to file your taxes for free, make sure to check out our full article on Filing Your Taxes for Free.
If, however, you’re just about to leave for basic training and you haven’t filed your taxes yet, don’t worry, you’ve still got a few options to choose from.
File your taxes before you leave for basic training
If your time as basic training overlaps the deadline for filing your taxes (April 15 on most years), then the best thing you can do is file your taxes prior to leaving.
Generally speaking, employers have until the end of January to issue W-2s, which should give you plenty of time to file your taxes before departing for basic training. So, if at all possible, it’s recommended that you do exactly that, so you aren’t left having to deal with last year’s taxes while training for your military occupational specialty or immediately after arriving at your new unit.
File for an extension before you leave for basic training
If you haven’t received the documents you need to file your taxes before you leave for basic training or aren’t able to complete your return in time, you can file for an extension with the IRS.
Individual tax filers, regardless of their income level, can use the IRS’ Free File service to electronically request an automatic tax-filing extension here. When completing the form, you’ll be required to estimate your tax liability, or any taxes that you expect you’ll owe once your return has been completed and filed.
The IRS recommends that you pay any taxes that you anticipate owing when filing for an extension, but it is not a requirement. The IRS offers three different methods of providing that payment: using Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or a credit or debit card.
Once your extension has been filed, you will have until October 15 of that year to file your taxes.
Use a Power of Attorney to have a loved one file for you
Another option available for incoming service members is filing a Power of Attorney (POA) that would give someone you trust the authority to legally represent you in matters like filing taxes. While there are a number of types of Powers of Attorney, the two that are pertinent to this tax discussion are General Powers of Attorney and Special Powers of Attorney.
A General Power of Attorney offers the broadest degree of authority to manage your affairs, and as such, should only be something you give someone that you’re sure you can trust. In effect, a General Power of Attorney allows the holder to effectively act in your place in most matters.
A Special Power of Attorney is a safer option as it limits the authority of the holder to certain matters. You can give someone you trust a Special Power of Attorney to handle specific matters on your behalf, like filing taxes.
A Power of Attorney can end in any one of three ways: on a specified date listed in the Power of Attorney, if you or the person you award the POA to dies, or if you revoke it in writing.
While there are online services to file a Power of Attorney, it is highly recommended that you speak with legal counsel to find the right type of POA for your situation and to ensure it is executed properly.
Can your parents claim you as a dependent while you’re at basic training?
Your parents can not claim you as a dependent during your time as basic training, but if you were a dependent living in their house last year (the year your filing taxes for) then they can safely include you when filing this year.
However, once you reach your basic training installation, the military is now providing 100% of your living needs, and in order to claim you as a dependent, a parent must be providing at least 51%. That means your status as a dependent being claimed on your parents’ taxes ends when you arrive at basic training.
Where can I learn more about military taxes?
The IRS maintains a webpage specifically aimed at answering tax questions for members of the military (you can find it by following this link) but there are lots of other great resources online. Military OneSource has the MilTax initiative that offers free tax filing services and and personalized support for service members and their families.
You can file your taxes for free with the IRS directly if your adjusted gross income is less than $73,000 per year by following this link.
If you have questions about filing taxes as a self-employed military spouse, we’ve got you covered here.
You can learn more about where to file your taxes for free once you’re in the military here.
And you can read our full interview about military taxes with Marine Corp veteran, longtime financial advisor, radio personality, and the author of the new book “New Tax Secrets,” Joe Lucey, by following this link.