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Just because your pay is tax-free in a combat zone, it doesn’t mean you can skip out on filing an income tax return. But, you’ve got a few months’ extra time.

As millions of Americans rush to meet the annual April deadline to file their taxes, U.S. servicemembers in combat zones are contemplating whether to take advantage of a 180-day combat zone extension. That is, 180 days from the time the person leaves the combat zone.

According to the Internal Revenue Service, most servicemembers wait to file. But many also pay while deployed, or have their family members at home fill in the forms for them.

Capt. John Morris, personnel officer for the 1st Armored Division’s 1st Battalion, 37th Armor Regiment, said he was wondering what he should do about his taxes while he is deployed to northern Iraq.

Morris said he filed his return from Iraq during his first deployment with the 1st Armored Division in 2003 and 2004, when soldiers were given some help on filing.

“It was basically like going to H&R Block and not having to pay. It was pretty good if your taxes were simple, but it might not have been very good if you had a complicated filing.”

Capt. Aaron Dixon was mulling it over as well.

“Some guys have already taken care of it,” said the commander of 1-37’s Company B. “A lot of guys, though, have their wives take care of it.”

The only military tax center in the Iraq theater of war is at Camp Arifjan, Kuwait, where staffers said they have been very busy this week with last-minute filers.

According to the tax code, enlisted troops serving in combat areas have all of their military pay excluded from federal taxes. Officers in combat zones can exclude up to $6,529 of their monthly pay.

Servicemembers should also be aware of the designation of their location, officials say.

“A lot of military operations don’t rise to the level of being declared by the president as ‘combat,’” Army Lt. Col. Janet Fenton, director of the Armed Forces Tax Council, told the military newsletter Deployment Quarterly. “But there are several contingency operations where servicemembers are outside the continental United States.”

Those “contingency operations” have the same tax-free status. It’s not just Iraq and Afghanistan where the tax benefits apply. Servicemembers in “support locations” such as Pakistan, Tajikistan, Jordan, or in parts of the Philippines, Djibouti and other locations also get the benefits.

Stars and Stripes reporter Monte Morin contributed to this story.

Tax help from the IRS

The IRS has an entire page of its Web site devoted to questions about filing from combat zones. For example:

Q: My son, who is a member of the U.S. Armed Forces serving in a combat zone, will file his individual income tax return for last year after the regular April 15 due date, but on or before the end of the deadline extension for filing that return. He expects to receive a refund. Will the IRS pay interest on the refund?

A: Yes. The IRS will pay interest from the April 15 due date on a refund issued to your son if he files his individual income tax return on or before the due date of that return after applying the deadline extension provisions. When your son files, he should put “COMBAT ZONE” in red at the top of that return. If his return is not timely filed on or before the extended due date, no interest will be paid on the refund except as provided under the normal refund rules. Even though the deadline is extended, your son may file a return earlier to receive any refund due.

Follow this link to the full IRS page.

— Stars and Stripes


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