I understand that when active duty in Iraq, there are many bonuses added to pay from being in active war zone, etc.. There is a "bonus" if you will, added for each category the soldier falls under. My question is that I want to know that if an active duty military personnel is in Iraq, are they taxed on their wages and if not, then what happens when they file taxes the following tax year? How can they file taxes on wages that were not taxable? If an E7 is doing a tour of duty overseas for a full calendar year, this means they are strictly active duty military....how does this work?
2007-02-27 01:24:38 · 6 answers · asked by Seal B 1 in Politics & Government ➔ Military
Money earned while in a "tax free" zone is just that. Tax free. So, no, they are not taxed on that money.
As for filing their taxes, they still receive a W-4 showing that they held a job, earned money AND that it was tax free. They are not penalized. In most cases, deployed service members are not gone for the entire tax year, i.e., they deployed either before or after April, and/or return before or after April. Any money earned while not deployed is still taxed.
2007-02-27 01:35:19 · answer #1 · answered by My world 6 · 1⤊ 0⤋
You don't pay taxes while you are overseas... this last time my hubby was in Iraq from Jan 2006-Oct 2006.... He also re-enlisted till 2012 while he was there so we could get the bonus without taxes being taken out..lol... When we filed taxes this year his gross(taxable) income was only about $2,700... He's an E-5 and we have 1 child that we got earned income credit for... We got back about $4,000 on our tax return. They have an option now where you can claim the money you made while in a war zone. But, when we did our taxes we would get more back by just claiming what he made after he got back to the states. basically, you don't claim the money you made while in a war zone, but you can if you want to.
2007-02-27 09:38:51 · answer #2 · answered by jessidawn_69 3 · 1⤊ 0⤋
while in a designated zone, pays are NOT taxed. This is in addition to special pays and allowances such as Hostile Fire pay/Imminent Danger Pay and Family Seperation Allowance(if qualified). The w2 issued at the end of the year will reflect non taxable income.
HOWEVER>> NOT all overseas zones are designated as tax free. Additionally, some people get taxed initially, and then a few weeks later gets reimbursed in a seperate deposit. This is mostly Resrves and Guard that are called up for AD.
2007-02-27 13:25:01 · answer #3 · answered by Mrsjvb 7 · 0⤊ 0⤋
Seal, regular active duty pay is taxable, however, combat zone pay is not. There was a publication put out by the IRS back in 2005 which might answer some of your questions called Publication 3, Armed Forces Tax Guide. It was for the 2005 tax year, but a lot of it still applies. Here's the link:
http://www.irs.gov/pub/irs-pdf/p3.pdf
Stay safe and thanks!
2007-02-27 09:43:14 · answer #4 · answered by bigbadnumber3 1 · 0⤊ 0⤋
It works like this: the salary that an active duty military member receives for his service is taxed the exact same way that your salary is taxed, regardless of where he is. There is a category of pay called "Hazardous Duty Pay" which is not taxable, and I think that's a small concession for someone who is in a free-fire zone defending your freedom, don't you?
2007-02-27 09:30:33 · answer #5 · answered by Team Chief 5 · 0⤊ 2⤋
Money is very little compensation for the emotional destruction of a human being.
We need to re-instate the draft.
2007-02-27 10:03:10 · answer #6 · answered by Anonymous · 0⤊ 0⤋