Military Saves Blog
Tips, advice, and the latest news from the savings world.
Did you know there are ways to file your taxes for FREE? No strings attached. Free tax preparation is an easy way to save lots of cash during tax season. The average cost of commercial tax return preparation is around $220, but some taxpayers pay well above that for a simple tax return.
Ways to file your taxes for FREE:
- Visit an IRS FREE Tax Preparation Site. Most communities across the U.S. have multiple tax preparation sites available starting mid-January through April.
- Military IRS Volunteer Income Tax Assistance (VITA) is available for service members and their families. Certified tax preparers are trained on military tax issues, including tax benefits for service in a combat zone. Visit https://www.militaryonesource.mil/vita-location-lookup to find a Military VITA site near you.
- The IRS VITA program offers tax preparation for households or individuals whose income does not exceed $56,000/year. Visit https://irs.treasury.gov/freetaxprep/ or call 800-906-9887 to find a free VITA tax preparation site near you.
- IRS Tax Counseling for the Elderly (TCE) or AARP Tax-Aide is available for all taxpayers (no income limit), with a focus on those who are 60+. Visit https://www.aarp.org/money/taxes/aarp_taxaide/ or call 888-227-7669 to find a TCE AARP Tax-Aide free tax preparation site near you.
- Do it yourself online (FREE!)
- MilTax (active duty military only) can be accessed at Military OneSource https://www.militaryonesource.mil/miltax-software.
- IRS Free File Alliance is for those with a total household income below $69,000 https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free.
- MyFreeTaxes from United Way Worldwide has no income limit myfreetaxes.com.
- Free File Fillable Forms are available on the IRS website and are recommended for more experienced taxpayers who know how to do taxes https://www.irs.gov/filing/free-file-fillable-forms/free-file-fillable-forms-is-closed.
Sometimes preparing for your tax appointment can be the most daunting part of filing a tax return. We’re here to help. Use this checklist for a seamless tax preparation appointment.
- Bring last year’s tax return. It’s not required, but it is helpful.
- Don’t forget to bring Social Security cards (or ITIN letters) for everyone who will be listed on your tax return. Tax sites need to see the actual card (or a picture of it), or a statement from Social Security with the name and social security number (SSN). You can’t claim the Earned Tax Credit (EITC) without this information. PRO TIP: photocopy all your family’s cards on one piece of paper, and keep it in the tax return envelope for next year.
- Bring your picture ID. The tax site will need to verify that you are really you. Make sure your spouse brings theirs if you’re filing jointly.
- If you experienced identify theft, bring your ID Theft PIN from IRS. Your return can’t be submitted without it.
- Gather all your tax records. Did you receive a W-2 from each place you worked? Do you have your unemployment statement? PRO TIP: Wait to schedule your appointment until all your documents are collected. An amended return can take a long time to process.
- Daycare expenses? Bring your provider’s name, address, and tax ID number/SSN as well as the total amount you spent. Make sure you claim the Child & Dependent Care Credit.
- Did you or any of your dependents go to college this past year? Bring Form 1098-T with the total amount of tuition, fees, and scholarships. PRO TIP: record how much was spent on books and equipment.
- Do you have unreimbursed PCS expenses? Bring the receipts! While the Tax Cuts and Jobs Act did away with allowing civilians to deduct unreimbursed moving expenses, active duty military can still deduct these expenses on Form 2903 if the move is a Permanent Change of Station one.
- Are you a reservist who must travel more than 100 miles from home for duty? You can claim unreimbursed travel expenses on Form 2106.
- Let’s talk money! Bring your checkbook or another way to verify your bank routing and account numbers for direct deposit. PRO TIP: Split your refund into multiple accounts using Form 8888. This is a great way to save a little and/or get ahead on some bills.
- Filing online? Know your last year’s adjusted gross income (AGI) (from line 37 of your Form 1040; line 21 on Form 1040-A, or line 4 on Form 1040-EZ.). If you used the same website and username last year, the program will be able to carry the AGI forward.
BONUS: Save money by getting your taxes prepared for FREE by local IRS-certified volunteers at a Volunteer Income Tax Assistance (VITA) site near you! Visit https://irs.treasury.gov/freetaxprep/ to find a site.
Each tax season, Americans are bombarded with numerous IRS scams and fraudulent schemes. There are lots of myths and urban legends floating around social media and the internet. Taxpayers should take caution and know that:
- The IRS will never contact you by email, text or social media.
If you have an outstanding payment or balance due to the IRS you will be contacted by snail mail first. You will never receive an email, text, or message on social media demanding that you pay the IRS. If you receive unsolicited, aggressive communications from anyone posing as the IRS DO NOT reply and report the incident immediately (see reporting information below).
- The IRS will never demand immediate payment.
If you receive a written notice or call demanding immediate payment, take caution. The IRS will always notify you by mail if you owe money. You will receive multiple letters leading up to your final notice. Additionally, each letter will include a payment due date and instructions on how to settle your balance.
- The IRS will never require you to use a specific method of payment.
There are many convenient payment options available for individuals who owe federal taxes. If you are called and asked to use a specific form of payment like a prepaid card, iTunes card, wire transfer or gift card, hang up the phone.
If you are told you can only make your payment in full, that’s another red flag. The IRS is willing to work with you, and you can apply for a payment plan online. For a full listing of acceptable ways to pay the IRS, go to www.irs.gov/payments.
- The IRS will never call and demand that you share personal information over the phone.
You can choose to pay your taxes by phone using the payment processing system. However, it’s important to note that the IRS will never call you and demand your credit card information.
We want to make the distinction clear: paying by phone is optional, but it will never be forced upon you. For a full listing of acceptable ways to pay the IRS, go to www.irs.gov/payments.
- The IRS will never threaten to get the police involved.
Legal action can be taken by the IRS if you neglect to pay your bill or fail to explain why you haven’t paid. But legal action does not equal threats to have you arrested or taken into custody. The IRS can seize your property, garnish your wages, or take money from your bank account to pay your debt. If someone calls you and threatens to call the police, hang up. That person is not a representative of the IRS.
Report Incidents Immediately
If you receive any unsolicited communications or contacts by an individual claiming they are the IRS, hang up or do not reply, and report it immediately.
Have a plan in mind when you file your taxes. If you’re due a refund, go ahead and split it up into multiple accounts (think checking, saving, and retirement or college saving account) using the 30-40-30 plan:
- 30% of your refund to pay off outstanding debts or catch up on bills
- 40% of your refund to pay for current expenses, needs, or wants
- 30% of your refund to establish or build up savings. This could be an emergency fund (start with $500) or longer-term like retirement or a large purchase like a home.
Use IRS Form 8888 to split your refund in up to THREE accounts. Form 8888 can be accessed with your tax preparer during your tax preparation appointment. It’s easy to use, so don’t forget to ask if your preparer doesn’t suggest it.
PRO TIP: Add the account and routing numbers or blank checks of the accounts you are using for the 30-40-30 plan to your tax documents folder so you’re ready to fill in Form 8888 before your complete your tax return.
It’s our favorite way to save, automatically and through direct deposit.
Filing income tax forms can be a complicated and somewhat painful process. Gathering documents is a chore. Tax forms can seem confusing to the uninitiated. And military families face additional obstacles at tax time: they may not know about certain military-specific tax provisions that can benefit them, and they are also prey to certain tax schemes that target the military community.