Recent data from IRS shows that about 60,000 active-duty service members and reservists owe close to $390 million in back taxes. The primary reason behind this is “CONFUSION” as per IRS. Apparently frequent overseas deployments and address changes by the military personal make it very complicated for them to file a timely tax return.
“Military Personal Tax Returns are till bit trick, ” said Sanjiv Gupta, CPA. He further pointed out a few things that make it harder for military personals to file timely tax returns.
- What kind of tax breaks do I qualify for? This is one of the most commonly asked questions among all taxpayers. But when it comes down troops stationed around the world, even a qualified CPA can get confused.
- Some time tax documents are mailed to an old address and taxpayers may never get it.
- Troops stationed around the world may not get an opportunity to timely respond to IRS.
- Stress from a job can also contribute to the late filing of tax returns.
IRS can also seize part of a servicemember’s paycheck until the taxes are paid off. Then why do we have $390 Million in back taxes from military personals? Well, just like the rest of the taxpayers, our troops also have some rights. IRS gives time to all taxpayers to get their act together and file the taxes.
However, the delinquency rate among military personals regarding federal taxes is less than the rate among the civilians working for the federal government. I guess you can’t really compare the rest of the Govt. Employees with troops. But just so you know, approximately 2% of service members are found to be delinquent, compared with nearly 3% for federal civilian employees.
As per data from IRS, military retirees have even hire delinquency rate: Nearly 4% owe $1.5 billion in back taxes, IRS data show. Do they really make that kind of money? You will be surprised to know how much an active service member makes. Especially when they are stationed outside the county. Just ask someone in your neighborhood – they might not tell you. But you can try.
At the end of the day – its worth it. Service members make good money and this is another great reason for young citizens to join our forces. Yes, you do have to pay taxes on this income but you have lots and lots of tax benefits and break.
Have a question about a military tax return or tax benefits? Call our office at 510-825-7563.