Essential Tips for Military Spouses

by | Aug 29, 2023

Being a military spouse comes with its unique challenges, and tax season can sometimes amplify these difficulties. Whether managing personal taxes while your spouse is deployed or running a business as an entrepreneur, understanding tax regulations can be daunting. This article aims to provide some valuable tax tips to help military spouses navigate this complex landscape.

First and foremost, the Internal Revenue Service (IRS) offers a comprehensive Armed Forces' Tax Guide, IRS Publication 3. This guide is available for download and outlines many critical military-related tax topics, answering regular tax questions and those specific to military spouses. It's a valuable resource that can help demystify tax laws.

A significant development in the tax law that affects military spouses is the Military Spouses Residency Relief Act, enacted in 2009. This law allows military spouses who earn income in the state where their spouse is stationed to claim that state or their spouse's legal residence for tax purposes. This could lead to substantial savings if the spouse's legal residence has lower tax rates or doesn't levy income tax. However, it's essential to consider factors such as voter registration, auto registration, insurance, estate plans, and professional licenses when deciding which state to choose for filing taxes.

For military spouses who run businesses or engage in gig work, the IRS offers a wealth of resources. The Small Business and Self-Employed Tax Center, the Gig Economy Tax Center, and the Tax Information for Businesses page provide information to help entrepreneurs manage their taxes effectively. Moreover, businesses generally need an Employer Identification Number (EIN), which can be applied for online.

To ensure that entrepreneurs stay on top of tax deadlines and payments, the IRS provides an Online Tax Calendar and the Electronic Federal Tax Payment System (EFTPS). These tools help businesses track due dates, actions, and facilitate easy payment of federal taxes.

For military spouses whose service members are deployed, accessing tax information can be managed through MyPay. In cases where joint returns need to be filed, the service member can grant power of attorney to the spouse, allowing them to file the joint return on their behalf.

Furthermore, most military installations offer the Volunteer Income Tax Assistance Program (VITA). This program, run by IRS-trained volunteers, provides tax help to service members and their families, understanding the unique tax issues they face.

The IRS also offers a Small Business Tax Workshop, available in seven languages. This virtual workshop helps new business owners understand and meet their federal tax obligations. They also provide e-News Subscriptions on a variety of tax topics, which can be beneficial in keeping up to date with the latest tax news.

In conclusion, being a military spouse presents unique challenges during tax season, but there are several resources available to make the process more manageable. It's essential to stay informed and utilize the assistance provided by the IRS and military installations to navigate tax season successfully.