Tax Tip: Serve Your Country, Get a Break

ByABC News
April 8, 2002, 3:13 PM

April 11 -- If figuring out your taxes at home feels like a battle, imagine trying to find your W-2 in a combat zone.

That is, a real combat zone. For the thousands of troops stationed in one of approximately two dozen official combat zones or in a hazardous duty area, filing tax returns is still very much a reality.

But to help military personnel, Uncle Sam has shifted some deadlines and added some benefits

Perhaps most useful is the automatic 180-day extension for filing returns and paying taxes if you serve in a combat zone or a hazardous duty area, explains David Grayson, senior product manager of Military Advantage at Military.com, an online resource for active duty, reservists, guard members, veterans and their families.

Members of the U.S. Armed Forces serving in a combat zone can also exclude certain pay including active duty pay earned while serving in a combat zone from their income, reducing their taxable earning, adds Grayson.

In addition, spouses of personnel stationed in combat zones can take advantage of these above benefits, even if they are non-military, advises Charles Enis, associate professor of accounting at Pennsylvania State's Smeal College of Business.

As long as one spouse is currently stationed, or has been stationed for at least one month, in a combat zone, the significant other can qualify for certain special allowances, he adds.

The breaks apply to those called up during Operation Enduring Freedom and serving in Afghanistan since Sept. 19, 2001. Also considered combat zones are the Persian Gulf area, Red Sea, Gulf of Oman, part of the Arabian Sea, Gulf of Aden, Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab Emirates. Those serving since March 24, 1999, in the Kosovo area, including Serbia and Montenegro, Albania, the Adriatic Sea and parts of the Ionian Sea, also qualify.

Reserve Your Credits

Taxpayers who serve on reserve duty qualify for certain tax exemptions as well.