Service Members Have Options Leading Up to Tax Day

With Tax Day, April 15, quickly approaching, service members have options for help filing their 2025 taxes, including assistance with navigating changes to tax rules, such as those enacted as part of last year's One Big Beautiful Bill Act.

First off, said Susan E. Mitchell, executive director of the Armed Forces Tax Council, service members can file their taxes late, if needed, due to deployments or other issues.

"There are long-standing tax filing extensions that apply just to service members," she said. "If they are stationed outside the United States and Puerto Rico, they get an automatic two-month extension to June 15."

That extension means not only filing two months later but also paying any due taxes two months later.

Beyond that, Mitchell said, all service members, no matter where they are stationed, can ask for an additional extension to Oct. 15. However, that extension is only for filing - any tax due still needs to be paid on time to avoid late filing penalties.

"And then of course, for anyone who's deployed to a combat zone, the deadline for filing and paying taxes is generally extended for the period of their service in the combat zone, plus 180 days," she said.

Some of the changes service members might encounter this year include an increase in the standard deduction for single, married and head of household filers and an increase in the contribution limits for 401(k) plans.

If family members work in the civilian economy, from 2025 through 2028, taxpayers may deduct tips and overtime pay. The One Big Beautiful Bill Act also changed the reporting threshold, increasing it to $20,000 in gross payments and 200 or more transactions annually on payment apps for the sale of goods and services.

If they're able, service members can prepare their own taxes using resources exclusively from the Internal Revenue Service. But Mitchell said Military OneSource also provides special tax preparation software, MilTax, for service members.

"The great thing about the MilTax program, if they decide to do it on their own, is that the service members also have available to them tax consultants by phone 24/7 if they have questions when they're completing their tax returns," she said.

Also, on some installations, there are volunteer income tax assistance sites where service members can get in-person tax preparation assistance.

Mitchell cautioned service members to be on the lookout for unethical tax preparation services.

"There are a lot of scams out there," she said. Scammers often target people by impersonating the IRS to try to get them to share personal information, by phone, text and email.

"It's important to know that the IRS doesn't initiate contact with taxpayers in these ways," she added.

Mitchell recommends that if service members have their taxes prepared off base and are due a tax refund, they wait to receive that refund rather than take a refund anticipation loan from their tax preparer, because the fees can be high.

"Generally, the IRS aims to get a refund back to you within 20 days," she said. "And if service members can just wait for those 20 days and not take that loan, they'll get their entire refund back instead of having to pay a fee out of the refund."

Also, under the One Big Beautiful Bill Act, starting July 5, parents of children under 18 with a Social Security number can open an investment account called a "Trump Account" in their child's name.

"The great thing about these accounts is that parents and employers, and relatives of the child, can contribute up to $5,000 per year to the account until that child reaches the age of 18," she said. The government will also deposit an initial $1,000 into accounts for eligible newborns.

"These are assets that are allowed to grow tax-free, although recipients have to pay taxes on the gains when the money is withdrawn," Mitchell said. "And after the child turns 18, the account is generally treated as a traditional [individual retirement account] and it's subject to the same rules as other traditional IRAs."

The program covers children born from 2025 to 2028. For more information, visit trumpaccounts.gov.