Taxes may be the furthest things from the minds of our military as they serve in remote areas around the world. But distance and time can add to the complexity of tax issues. H&R Block offers six answers to commonly asked tax questions from those in uniform.

 

The IRS grants extra time to file returns, request refunds or even pay taxes due. The extension is the period of time served in a combat zone, plus any continuous time outside the U.S. you were hospitalized for injuries sustained in a combat zone, plus 180 days.
 

For example, for soldiers whose duty in Iraq ends Dec. 31, 2009, their 2009 tax return is due Dec. 12, 2010 – 180 days after their last day of service and after the usual tax return filing due date of April 15, 2010.

 

The tax filing deadline is April 15, 2010. If you can’t file your return by then, you can apply for a six-month extension. However, an extension to file is not an extension to pay. To avoid late fees and interest, you must estimate your taxes owed and submit any balance due, along with your extension form.

 

If you’re on a tour of duty outside the U.S. or Puerto Rico, you have an automatic two-month extension to file your returns. If that’s not enough time, you can file the extension form for an additional four months.

 

Yes. Military personnel are required to sign their own tax forms. If you’re out of the country, the return may be sent to you or power of attorney must be granted for someone else to sign and file the return. You can establish power of attorney by completing this form.

 

One exception: Soldiers hurt in a combat zone may have someone else sign the return without pursuing power of attorney. If that’s the case, a statement should be attached to the return explaining why the soldier isn’t signing their own return. 

 

A credit worth up to $5,657 is available to military personnel with earned income of less than $43,279, or $48,279 for joint filers. To qualify, taxpayers also must have children under the age of 19 or full-time students between the ages of 19 and 23.

For military personnel without children, a smaller credit worth up to $457 is available. However, the earnings threshold is $13,440 for an individual or $18,440 for a joint return.

 

Most taxpayers started taking home more in their paychecks last year thanks to a change triggered by the Making Work Pay Credit. The credit is up to $400 for single filers or $800 for joint filers. But the increased take home pay means taxpayers should take another look at the withholding allowances on their W-4s. H&R Block’s Making Work Pay calculator can help military personnel determine if they’re withholding enough or if they need to adjust their allowances before the end of the year.

 

No. Soldiers called to active duty may take penalty-free distributions from retirement plans. Unused funds from flexible spending accounts may be used tax- and penalty-free.

 

For more information about military tax benefits, visit www.hrblock.com/military, the IRS’ Armed Forces' Tax Guide or the IRS’ Tax Guide for U.S. Citizens and Resident Aliens Abroad.