7 Helpful Tax Tips for Veterans
Most of us dread filing our annual taxes. Taxes however are a fact of life and failure to file can cause us no end of problems. Veterans in Virginia who are filing both state and federal taxes may not be aware of the various deductions their military service entitles them to and how to make sure you’re taking advantage of them. Here are some simple tips to make sure you get the full benefit of the deductions you’re entitled to:
Tip # 1 – Make sure you keep good records
One of your most valuable documents is your DD214 (Certificate of Release or Discharge from Active Duty) because this confirms your status as a veteran. If you misplace this document, you may need to request a copy from the Veterans Administration. Many vets make a copy of this record and store it in their safe deposit boxes or other safe location. If you are having someone prepare your taxes on your behalf, make sure you take a copy with you.
Tip # 2 – Understand various benefits available
Veterans who have left service due to disability may be entitled to certain tax deductions they might not otherwise be eligible for. Some benefits may impact only federal tax filings but for some, Commonwealth of Virginia taxes may be impacted as well. Certain reductions in property taxes and other benefits may be available. For most veterans, income obtained as disability payments are exempt from state and federal taxes.
Tip #3 – Benefit plan deductions
Many veterans are not aware that if they pay premiums to Survivor Benefit Plan or Retired Serviceman’s Family Protection Plan the premiums may be deductible on your taxes. Talk with your tax preparation professional about any premiums you are paying for these benefits.
Tip #4 – Non-taxable spousal support
Under The Uniformed Services Former Spouse Protection Act payments ordered in a divorce may be deducted as non-taxable income. Be certain to discuss spousal support payment with your tax professional as you could be entitled to file an amended return if you were unaware of this option.
Tip #5 – Tax ramifications of change in status
Veterans have up to three years after being discharged to file for disability benefits. Should you be awarded disability benefits, those benefits are not taxable. This may also impact your prior tax filings. In these cases, veterans may wish to file an amended return.
Tip #6 – Important tips for retirees
If you are retiring from the military or have previously retired, you may not be having taxes withheld from your payments. Fill out Form W-4P as quickly as possible to avoid having a tax liability at the end of the year. Your tax preparers can help you obtain these forms if necessary.
Tip #7 Contact experienced Virginia tax preparers
One of the best ways to ensure you get every deduction you are entitled to is to work with a tax professional. None of us likes the idea of paying more taxes than we have to and as a veteran, you have the right to certain deductions that many of your civilian counterparts may not have access to. You should take full advantage of these deductions.
When it comes to tax preparation, you need to work with tax preparers who have a solid understanding of the tax code. You can count on Rue & Associates for professional tax preparation which could mean significant tax savings for you.