Due to the nature of their work, veterans often face unique fiscal situations. Therefore, it’s extremely important to stay abreast of the most recent developments on this topic, that may change drastically from year to year.
The following tips provide a general guide to gain a better understanding of the benefits you may qualify for and the resources that the Internal Revenue Service (IRS) puts at your disposal as a veteran.
Keep Your Records in a Safe Place
Changes of residence may represent a risk for your documents. Make sure to keep them in a dry, safe place and to make multiple copies that you can store in separate locations. Some of the most important documents include your Social Security Number, a copy of a government-issued ID and digital copies of forms DD214, DD257 and NGB22.
Some Benefits Are Taxable
When filing your taxes, keep in mind that some of the benefits you receive as a veteran are taxable, for example retirement pay, severance and healthcare. Healthcare represents a special case, since veterans can opt to stick with their VA coverage, or purchase their own. Consider that if you decide to keep your VA coverage you may not be eligible for premium tax credits.
Benefits Change on a State-to-state Basis
Don’t forget that benefits for veterans may change depending on your location, since every estate has its own Veteran Affairs office. These benefits include income and property tax exemptions as well as retirement pay exemptions.
Also, keep in mind that benefits may change from year to year, so it’s important to contact a tax expert or your local VA office to get information specific to your individual situation.
Take Advantage of the Resources at your Disposal
The IRS offers many resources you can use when filing your taxes as a veteran. Many of them are available online for your convenience. From education benefits to filing deadlines, this comprehensive list provides information of interest for current and former members of the military.
You May Be Eligible for Earned Income Tax Credit
This refundable federal income tax credit is geared towards low- to moderate-income workers and their families, and it may allow you to keep more of the money you have earned. That extra amount can be very important for veterans, since they can use it to create an emergency fund to face unexpected occurrences.
As with all matters regarding taxes, the best is to seek advice from the professionals. Get in touch with our experts at JT Tax Services to take advantage of their know-how. Don’t hesitate to contact us by email, telephone (805-984-8890) or through our accounts on Facebook, Twitter and LinkedIn.