Benefits of Having Tax Breaks for Military Families

Benefits of having tax breaksIn the Army? Use These Opportunities To Ease Your Tax Burden written by: Bernd Blezzed Are you a member of the military? Similar to other occupations, army men and women are bound by law to pay taxes. However, the government recognizes the risky nature of their job, and their undying dedication to protect the sovereignty of the nation. In line with this, Armed Forces members, reservists, and veterans are beneficiaries of various tax exclusions and exemptions.

Being on the front-line can be a trying moment, for not only the army men, but also their families as well. The tax period can bring added agony to you, especially if you are not aware of the various exceptions provided by the government. Current tax regulations give military members tax benefits, which can help you find some relief. Here is how you can take advantage of the tax breaks for military families.

Opportunity for Savings
Prior to November 11, 2009, military spouses did not have an income tax relief to enjoy. They had to pay tax to the state of residence of the spouse. However, the Military Spouses Residency Relief Act gives people in the military the liberty to claim the legal residence of your spouse, or the state you are located. Tax regulations vary from one state to another, so you and your spouse need to look at the benefits available before settling for any particular state. Remember to consider factors such as estate plans, auto registration, voter registration, and car insurance as well. This is an opportunity for military families to make savings.

Withdrawal from IRA without Penalties
Sometimes, being in active duty is a financially draining affair. The IRS understands that you may need to go back to your retirement account. Being in the army gives you the advantage of withdrawing money from any retirement account and getting a waiver of the usual 10 percent penalty tax.

Flexibility When Selling Your Home
Tax breaks for military families also makes sense when it comes to selling your house. Generally, taxpayers do not need to pay capital gains taxes when they sell a house, as long as they used it as their main residence for at least two years before selling it. You can be exempted from this rule for up to 10 years if they are on an extended duty.

Relocation Made Easier
Moving every few years is not strange to military families, yet this is usually an expensive affair. The IRS allows you to deduct some expenses of such relocations. Even after your career in the military is over and you need to relocate, you may still qualify for tax deductions that make it easier for you and family.

Place Your Money in a Thrift Savings Plan
The TSP is your great opportunity to invest for the future. This is because putting your money in this plan helps you save a lot of money. You will be amazed at how easy it is to enroll for the plan. The fact that the TSP comes with an extraordinarily low overhead makes it even more appealing.

Tax time does not need to be frustrating for you. The tax breaks for military families discussed here can lessen the burden for you leading to a fulfilling military

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