Special Tax Considerations for Military Families

There is no question that active-duty military families have unique tax challenges. Military members and their families should be aware throughout the year of how federal tax rules to them. Even more crucially, families must keep complete records including an organized collection of accounts with all proper receipts and paperwork.

Below are some of the more important rules that apply to the military family. Review these to make certain your family is taking full advantage of these rules and exemptions.

Non-Taxable ItemsCombat Pay

Combat pay income from the military is exempt from federal income tax while serving in a designated Combat Zone as well as Contingency Operations zones, as determined by the Secretary of Defense. State bonuses paid to military or their dependents are included in the combat pay exemption.

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