Spouse Calls: Deployment and taxes
Q. My wife was deployed for all of 2007, so she didn’t have to pay federal income tax on her military earnings for that year. Should she still file a tax return?
A. Yes, she should, if she wants to receive the economic stimulus payments offered by the federal government this year. Qualifying for these payments requires filing of a 2007 tax return with the Internal Revenue Service by Oct. 15 of this year. The return must show at least $3,000 in earnings for 2007.
Although combat pay is nontaxable, it still qualifies your wife to receive an economic stimulus payment. The IRS has prepared directions especially for veterans and others with nontaxable income to file 2007 returns for this purpose. A relatively simple form 1040A is required. The IRS directions are online at http://www.irs.gov/ pub/irs-pdf/k1040a3.pdf, or ask a tax preparer about package 1040A-3.
Q. I have a friend whose husband is deployed. She was recently telling me that she is having a stressful time. One of the things that is really worrying her is taking care of her taxes. I told her I thought she was not required to file her taxes until after her husband returns. Am I correct?
A. Yes, you are correct. The IRS does allow more time for deployed military members to file their tax returns. The additional time is 180 days, plus the number of days during the filing period (Jan. 1 to April 15) that the military member was deployed.
For example if your friend’s husband returns this year on Feb 1, their family has 180 days, plus the 30 days of the filing period that the active duty spouse was absent (Jan 1 through Feb. 1.) This means their deadline for filing 2007 tax returns is 210 days after the spouse’s return date of Feb 1, 2008.
If a spouse left during the filing period for 2007, for example, on April 1, 2008, then the remaining 14 days during which he or she is absent is also added to the 180 days, so the family would have 194 days from the date the deployed spouse returns to file the taxes for 2007 year.
This extension applies to both spouses, even if filing separately.
This is one item your friend can take off her stress list. Of course, if she and her husband are expecting a refund or an economic stimulus check, they may want to file sooner rather than later.
More tax facts for military families:
• You can file a joint tax form in the absence of your active-duty spouse with a power of attorney or an IRS form 2848.
• Military members and spouses who live outside the U.S or Puerto Rico have until June 15 to file tax returns.
• The Military Volunteer Income Tax Assistance program provides free tax advice preparation and filing. You can get more information about VITA at your installation’s legal office or online at Military OneSource: www.military onesource.com.
• Military OneSource also offers tax help by phone (1-800-730-3802) or e-mail; as well as free access to TaxCut Basic, an online H&R Block program. To access it, military families must register on Military OneSource.
• For more information about federal tax returns and the military, see the Armed Forces Tax Guide for 2007 at http://www.irs.gov/publications/p3/ index.html.
• Another good idea: Ask a tax adviser from your spouse’s unit. I did! Thank you, Capt. Christina Perez, from 3rd Air Force, for your help on this subject.
Terri Barnes is a military wife and mother of three. She lives and writes in Germany, where her husband is stationed at Ramstein AB. Send questions or comments to email@example.com and see the Spouse Calls blog here.