Armed Forces Tax Information
The most frequently asked tax questions related to Armed Forces Tax Information
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Answer Tax QuestionsI am a member of the U.S. Armed Forces. I fly missions over a combat zone as part of the military operations in that combat zone. Is any part of my military pay excluded from gross income?
Asked Tuesday, December 27, 2011 by an anonymous user
Yes. The combat zone includes the airspace over it, so you are serving in the combat zone. See Q&A-2 above for a discussion of the amount of your military pay that is excluded.
I am a member of the U.S. Armed Forces stationed in a combat zone. Is any part of my military pay for serving in this area excluded from gross income?
Asked Tuesday, December 27, 2011 by an anonymous user
Yes, if you serve in a combat zone as an enlisted person or as a warrant officer (including commissioned warrant officers) for any part of a month, all your military pay received for military service that month is excluded from gross income. For commissioned officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received.
My wife and I are both enlisted personnel serving in the U.S. Armed Forces in the combat zone. Are we each entitled to the income tax exclusion for military pay?
Asked Tuesday, December 27, 2011 by an anonymous user
Yes, Each of you qualifies for the income tax exclusion for your respective military pay.
What is the tax ramifications of military differential pay?
Asked Tuesday, December 27, 2011 by an anonymous user
Military differential pay is wages and should be reported in box 1 of Form W-2 as wages for income tax purposes. Military differential pay is includible as wages for income tax purposes on Form W-2, but is excludable from social security and Medicare taxes (FICA).
How does a person who receives military differential pay report this on the federal 1040 income tax return?
Asked Tuesday, December 27, 2011 by an anonymous user
These amounts are included in wages on Line 7 of Form 1040.
How will my military pay for active service in the U.S. Armed Forces in a combat zone appear on my Form W-2, ?
Asked Tuesday, December 27, 2011 by an anonymous user
Military pay attributable to your active service in the combat zone that is excluded from gross income will not appear on your Form W-2 in the box marked "Wages, tips, other compensation.
" However, military pay for such service is subject to Social Security and Medicare taxes and will appear on your Form W-2 in the boxes marked "Social security wages" and "Medicare wages and tips."
If you believe you are entitled to the military pay exclusion, but it is not reflected on your W-2, ask your service branch to issue a corrected Form W-2.
" However, military pay for such service is subject to Social Security and Medicare taxes and will appear on your Form W-2 in the boxes marked "Social security wages" and "Medicare wages and tips."
If you believe you are entitled to the military pay exclusion, but it is not reflected on your W-2, ask your service branch to issue a corrected Form W-2.
What is military differential pay?
Asked Tuesday, December 27, 2011 by an anonymous user
Some employers voluntarily agree to continue paying full wages to their employees who are called to active duty. This is commonly referred to as differential pay. Differential pay is any payment made by an employer to an individual for a period during which the individual is performing service in the uniformed services while on active duty for a period of more than 30 days and represents all or a portion of the wages the individual would have received from the employer if the individual were performing services for the employer.
What is a Veteran's Administration mortgage?
Asked Thursday, December 22, 2011 by an anonymous user
A mortgage loan backed by the Veteran's Administration requires very low or no down payments and has less requirements for qualification. Generally, the interest rates are lower than what is being offered in the marketplace. Members of the U.S. Armed Forces are eligible for the loans under certain qualifying conditions. Contact the local Veteran's Administration office for more information.
Are my Marine reserve training wages taxable?
Asked Wednesday, November 22, 2000 by an anonymous user
Yes. Your Marine reserve training compensation are taxable and reportable on IRS Form 1040 page 1 as wages.
