• September 11, 2015
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While nothing can truly compensate for the dedication our military men and women give our country, there are a few tax benefits people in the US Armed Forces get from Uncle Sam as a way of saying ‘thank you’ for your service. Too often these benefits go unused because almost no one has less time to research tax benefits than military personnel, especially if they are not working with a tax professional knowledgeable in this area.

If you or a member of your family is part of the US Armed Forces, make sure your tax professional knows the cost saving benefits accorded to military personnel.  The Law Offices of Nick Nemeth, PLLC provides a high-level breakdown for you.

Extension in Tax Filing Deadlines

The deadline to file tax returns, filing claims for refund  and paying taxes is automatically extended for 180 days if:

  • You serve in the armed forces, in a declared war zone.
  • You serve in the armed forces for deployment outside the US away from your permanent duty station while participating in an emergency operation.
  • You serve in a war zone in support of armed forces such as accredited correspondents.

In addition, spouses of individuals who served in a war zone or offshore emergency operation also qualify for the provision.

Exclusion of Combat Pay

If you are a member of the US armed forces serving in a combat zone, your compensation includes non-taxable combat pay. It means you don’t need to include combat pay in the gross income on Form W-2 – a.k.a. Wage and Tax Statement. You can exclude combat pay if:

  • You serve in a war zone that the US President designates in an executive order.
  • You serve in a qualified dangerous duty area designated by congress while receiving enemy fire pay in agreement with 37 USC 10.
  • You serve in a region outside war zone and Department of Defense certifies that your service is in direct support of military operations in a war zone.

Utilization of Earned Income Tax Credit

Combat pay is non-taxable, and therefore, you don’t need to report it for Earned Income Tax Credit (EITC). You can view the amount of your non-taxable pay on your Form W-2, in box 12 with code Q. You and your spouse, however, may also opt for inclusion of combat pay in your gross income for EITC. It might reduce the amount of your tax burden or help you get a higher refund.

Deduction of Travel Expenses

If you are a member of the US Armed Forces, you can remove unreimbursed travel expenses if they happen during your travel away from home. The term “home”, in the current context, implies your permanent duty station, such as a base or ship. The expenses include transportation cost, laundry, and business phone calls, while you:

  • Travel from one place to another, 100 miles or more away from home.
  • Attend a work-related conference away from your permanent duty station.

Deduction Related to Uniform

All members of the US military must wear uniforms whenever they are on duty, but may also be required wear them during off hours,  you can typically deduct  expenses which were not reimbursed  for their cost and upkeep. These include:

  • Utility and military dress uniforms
  • Uniforms for reservists
  • Objects that can’t be replaced by regular clothing (Corps devices, swords, insignia of rank, etc.)

Deduction of Expenses Related to Education

Military personnel can remove unreimbursed cost of qualifying education that relates to their work, if it fulfills any of the two criteria defined by the IRS. These are:

  • If a certain law or employer mandates the education to sustain the current job or salary.
  • If the education sustains or develops skills required for existing work.

No Tax Payment on Profits from Sale of Home

Profits from the sale of the main residential property may be tax-free for the members of the US Armed Forces. In 2014, you could discount up to $250,000 of profit from the sale of a house; however, you can’t remove a loss from the sale of your main residence.

Nullification of Tax Liability

Tax obligation is forgiven, or if already paid, refunded, if a member of US Armed Forces dies:

  •    During active service in a war zone
  •    Due to any disease or wounds received while being posted in a war zone
  •    Due to wounds received during a terrorist attack

Limit on Interest Rates

Regardless of the amount of liabilities you accumulated  before joining the military, you can’t be charged more than 6 percent per year. This reduction in rate applies only if your service significantly upsets your capacity to pay. However, the reduced rate applies only during the period you are in active service.

Penalty-Free Retirement Plan Withdrawals

If you’re serving in the military reserves, you might be able to take early withdrawals from IRA and 401(k) accounts without having to bear any penalty. To qualify for this exemption, you must have been called to active duty after Sept. 11, 2001 for more than 179 days, and you must make the withdrawal while you are on full-time, active duty.

For more info, visit IRS Armed Forces’ Tax Guide (Publication 3) on www.irs.gov.

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What Our Clients Have to Say

Brent VahleBrent Vahle
19:13 02 May 24
I called to see if they could help reduce some penalties and fees. The person I spoke with told me it might be counterproductive for them to take my case since their feels would likely equal the amount of penalty/interest abatement. I decided to pass on moving forward but was so happy to hear a legal team, or any business for that matter, who has that much integrity. I feel most others would likely try to take my money anyway. I hope I never have to go through this again, but if I do, I will definitely use the Law Offices of Nick Nemeth!
Jason WinkleJason Winkle
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Matthew SwigartMatthew Swigart
12:14 02 May 24
Great attorney who was able to provide quick and useful advice. Although my situation did not warrant their services, they still took the time to discuss solutions I could explore. I highly recommend visiting this office!
Tony PantojaTony Pantoja
12:57 09 Apr 24
Very professional and very knowledgeable, Jamie Flores was very straight forward and professional, a firm that doesn’t just take your money, Thanks
Carla AtwalCarla Atwal
10:52 02 Apr 24
Nick was wonderful in guiding me with direction on some tax questions I had. He was concise, and to the point, and was happy to provide general info to me at no charge. I truly appreciate him and would highly recommend him.
Miguel AlvaradoMiguel Alvarado
15:56 25 Mar 24
By far the best attorneys I have ever worked with. They’re are very helpful and supportive from day one. They went above and beyond to make sure all my documents were submitted on time and gave updates as soon as they received them. I cannot name a single flaw in their work. Their team of assistants are very professional and seem to all be on the same page. I’ve made multiple phone calls and sent a ton of emails to their staff and they were able to help me all through the course of the case. I cannot express my gratitude enough for how excellent they handled my case.
Lucy FoyLucy Foy
06:55 19 Jan 24
My first appointment I had with, Tax Attorney Nick Nemeth, gave me such a sense of relief. He listened and gave me his professional advice, Mr Nemeth took my case. I was well kept updated, by phone calls and letters. That really impressed me and gave me so much confidence in them. The case went on for a couple of months. The day I received the call from one of his team members Kyle, informing me that the case was resolved and that I owed absolutely nothing to the IRS, I was overwhelmed with joy. I would recommend this law firm to anyone that needs help, with any tax issue. Thank you, to the Law Firm of Attorney Nick Nemeth and his team.
Bradley RunyonBradley Runyon
20:17 13 Jan 24
I received a tax bill in the mail from the IRS last year in 2023. The fees and penalties I owed were something I myself could not afford. I reached out to Nick Nemeth's firm and received the best experience you could imagine. The team was professional, educational, and fast. If you have a tax issue with the IRS using another firm other than Nick Nemeth's would be an error in judgment. I would recommend their services above others.
Sue HulsemanSue Hulseman
19:55 11 Jan 24
Working with Nick Nemeth and his team to resolve my debt with the IRS was the best decision I could have made. I felt such relief knowing I didn’t have to deal with the IRS myself. They did a wonderful job and were responsive to my questions and kept me abreast of my case. My outcome was exactly what I was hoping for. I strongly recommend using them if you have an issue to resolve with the IRS.
20:53 21 Dec 23
I had an incompetent tax preparer, who also ignored several notices from the IRS, which in the end resulted in a lien on my property. I did not know what to do and an attorney friend recommended that I contact the Nick Nemeth Law Offices. I met with Jamie Flores and Ivan Nalbantov in December 2021 for a free consultation, and right away was impressed by their thorough examination of my paperwork and extensive knowledge of IRS tax laws. I felt not pressured and appreciated their advice and in the end decided that I would pursue resolving the issue by myself. I paid the IRS Civil Penalty and, as recommended also submitted a letter to the IRS requesting a refund and explaining what happened. I am glad to report that my persistence finally paid off. My case took two years to resolve and I finally received a full abatement/refund check from the IRS in December 2023. I could not have done this without the straightforward recommendation of Jamie and Ivan; and I highly recommend the Nick Nemeth Law Offices to anyone needing help with the IRS.
Susan WilsonSusan Wilson
03:27 25 Jan 23
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Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
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