CAMP CASEY, South Korea — A typical 2nd Infantry Division soldier deploying to Iraq this summer will save between $2,000 and $4,000 in taxes during a one-year tour, says an Army tax expert. But first, they’ve only got one day left to file their 2003 taxes under overseas extensions.
Capt. Patrick Davis, of 2nd ID’s Headquarters and Headquarters Company, heads a Camp Casey-based unit helping soldiers and civilian defense workers in Area I prepare their taxes. The 3,600 2nd Brigade soldiers headed to Iraq later this summer, like other servicemembers in combat zones, won’t have to pay taxes during the time they’re in theater, he said.
U.S. citizens overseas have until Tuesday to file their 2003 tax returns.
“There are tax breaks for deployed soldiers. Any money they make while they are in a combat zone is tax-free,” he said.
Combat zones, for tax purposes, are places defined by Congress, mostly in the Persian Gulf and Eastern Europe, he said. A typical 2nd ID soldier, ranked E-4 to E-6 and deployed to Iraq for a year, will save $2,000 to $4,000 in taxes.
But some soldiers serving in combat zones end up owing extra. Up to 5 percent of soldiers and civilians seeking assistance from the 2nd ID tax experts have back taxes to file from previous years, he said.
“There are a lot of soldiers [who owe back taxes], especially soldiers who are in a combat zone during the times they would be filing taxes,” Davis said.
People owed refunds are not penalized for filing late, he added.
“The government hopes you never file because they will just collect the interest on what they owe you,” he said.
Those who owe back taxes have to pay interest back to April 15 of the year the taxes were due, and can be charged penalty fees as high as 44 percent of the tax owed, Davis said.
Soldiers who might owe money to the Internal Revenue Service include people who have earned money from investments, or people who have claimed too many tax exemptions at the start of the year. This tends to hit recently divorced soldiers who might no longer be able to claim their children as dependents, he said.
So far this tax season, the 2nd ID tax experts have prepared 4,000 sets of taxes and advised another 1,000 soldiers who had their taxes done by civilian accountants, Davis said. Many 2nd ID soldiers do their own taxes, something the division encourages.
Soldiers tend to have young families with simple financial arrangements, making it easy for them to do their own taxes, officials said.
The 2nd ID operates tax offices at Camp Page, Camp Red Cloud and Camp Howse, and sends out teams of tax experts to units on request. Each unit also has its own tax adviser, usually an officer or senior noncommissioned officer trained in the basics of tax rules so they are able to advise soldiers.
Davis said the tax experts enjoy their jobs.
“The American tax system is considered one of the most complicated in the world. [The soldiers] don’t understand it. We do understand it and we are able to help them get through it. Except in a few cases where people owe money, we are getting people money back, so they leave happy. It is something tangible we are providing and something these soldiers really could use,” he said.
