After the holiday season comes a much-needed season of rest and quiet…unless you’re a military family preparing for tax season. All tax documents are required to be sent out by January 31, but some do not arrive in mailboxes until early February. If you’re a military family who has recently moved, it may take even longer to receive all of your documents. If you’ve worked in more than one state, hold residency somewhere other than where you currently live, or if you own a home in another location, taxes can get even more complex.
Here’s a few documents to be gathering as you prepare for tax season, to help you file early and avoid the late tax season chaos:
1. Income statements. This will be a summary of all the wages you’ve been paid during the year. It will be either a W-2 from your employer (found in DFAS for military service members) or a 1099 if you’ve done contract or freelance work.
2. Investment income. Investment income is also reported as taxable income. This will be provided via interest statements from your bank (1099-INT), investment reports from a broker (1099-DIV or 1099-B), or an income statement from a rental property.
3. Tax deductible expenses. Some expenses are considered tax deductible and might reduce your taxable amount, aka lower the amount of money the IRS says you owe them. Deductible expenses include childcare costs, unreimbursed moving costs, rental home expenses like property manager fees or house repairs, college tuition expenses, property taxes, mortgage statements, etc.
4. Charitable giving. Donations can also reduce your taxable amount. If you’ve donated to any religious or nonprofit organizations this year, you should receive a statement of your tax-deductible donations that you will report when you file.
5. Business expenses. Contractors and entrepreneurs often have expenses that can be tax deductible. This usually includes licensure, equipment, inventory cost, wages paid, etc. It is up to each person/ entity to keep track of these expenses throughout the year with paper receipts or an electronic bookkeeping system.
Often, your banking institution will track many of these categories for you and send the tax documents to you electronically and via mail. Armed Forces Bank, a trusted partner of the MilHousing Network, is dedicated to serving military and veteran families through banking and mortgage products.
When in doubt, consult a tax professional to help you review your tax filing for the maximum return with the least amount of errors. Oftentimes, military and veteran families can find tax prep assistance through various non-profit organizations, within your local military installation, or even online.
This article is brought to you by Armed Forces Bank. Offering military members full-service banking since 1907. Armed Forces Bank knows military members have different needs. They pride themselves on offering diverse banking solutions. If you’re stationed anywhere in the world, you need banking that’s convenient for you and your family. Banking that works when you need it.