Financial expert Ellie Kay offers tips for navigating the income tax filing maze.
Posted in , Jan 30, 2015
Military families are “my people” in so many ways. I was the daughter of an Air Force Chief, the wife of the world’s greatest fighter pilot (who flew jets for 30 years) and the mom of a Marine, Air Force pilot and West Point cadet.
So when I give advice, it’s like I’m giving it to family–because I am! Currently, I work with the Yellow Ribbon Program helping Air Force Reservists, the Navy Seals by teaching at events, the Marines in presenting my “Heroes at Home” conferences and the active duty Air Force on a tour made possible by USAA.
Recently, I’ve partnered with TaxACT to put together some great up-to-date information for this time of year. Taxes aren’t simple but that don’t have to be that complicated if you follow your ABC’s.
A is for Accuracy
To be more accurate: DO IT NOW.
Procrastination can lead to inaccuracies and common human errors due to transposed numbers. This could cost you hundreds of dollars in penalties or missed deductions. So file early and when you are relaxed and don’t put it off until the last minute.
Accurately claim eligible deductions.
Accuracy means checking it twice.
Double-check all the numbers you enter to make sure you are not making mistakes. Then have your spouse double-check it as well. Two sets of eyes are better than one.
B is for Beneficial
Take advantage of all your military benefits and don’t pay taxes on certain income and benefits, including:
Take tax credits for which you qualify.
Use direct deposit.
If you’re getting a refund from the IRS, choose direct deposit and e-file your return for the fastest possible refund. Select that option when you file your federal refund for free at TaxAct.com. You’ll also be able to track the status of your return and refund.
C is for Clever
Clever people file on time.
But do you know when your due date is? The filing deadline is April 15 for most Americans but if you or your spouse is serving outside the U.S. or in Puerto Rico on April 15, your tax return isn’t due until June 15, 2015.
If you or your spouse are in a combat zone, your tax return is generally due 180 days after your last day in the combat zone or your last day in a hospital for injuries sustained in combat. If you’re stationed outside the U.S., you still need to file a return.
Clever people don’t pay more.
You can file your federal taxes for free at http://www.taxact.com/. It will guide you through military tax benefits and your entire tax return. All you have to do is answer easy questions.
If you need to file a state return, TaxACT offers a military discount and you will get it for only $5. You’ll automatically receive the discount after entering your Form W-2 information.
Clever people are smart with their refund.
Don’t spend your refund on a trip to Disneyland. Instead, put any refund you get toward consumer debt or toward building up your regular savings account.
You should have 3 to 6 months of living expenses in this account because life in the military is uncertain and every family needs a safety net.
The Operation Homefront Villages I visited (see more below) were filled with military families who were homeless because they had no financial resources to draw from.
Clever people help others.
The feeling you get from helping others is priceless, and smart people know this.
If you are lucky enough to get a refund, then you might want to consider giving a donation to a non-profit that you believe in such as Fisher House where they provide rooms for families near hospitals where our military members are recovering from serious injuries.
Or, consider Operation Homefront which provides, among other services, a place for wounded warriors to live with their families until they can get back on their feet again.
Ellie Kay is the author of 15 books including the award-winning book for military families called Heroes at Home. Currently, Ellie is on tour presenting her “Heroes at Home Financial Event” to Air Force Bases, made possible with a generous donation from USAA.