Military Resources
Completing Your Tax Return
The US government does not charge you to pay taxes. However, navigating the tax forms can be difficult, and financial service companies give the impression you must use their software to pay taxes. With some training, you can fill out your tax return directly with the IRS- who does not charge you.
The IRS' tax filing service is referred to as Free File Fillable Forms. The IRS Tax Planner Excel File is intended to help organize data needed to complete the Form 1040 Tax form.
IRS Tax Return Service
The free IRS service is available at the IRS Free Fillable Forms website. Note that pertinent links are only available during tax season (January - April).
If you have less than $73,000 total taxable income (does not include BAH/BAS), there is a more user-friendly option. (This applies to most O-2 & below & and most E-6 & below who are single)
Personal note: In the past 6 years, I have never filled out the IRS form correctly the first time. I hit submit, and 10 minutes later the IRS sends you a rejection notice with instructions on how to fix the error. Normally by my third attempt, I've cleaned out all my mistakes, and the IRS 'accepts' my tax return.
Should I use the IRS' free service?
Yes, if:
If you receive all your income from a W-2 source - this means all military servicemembers
If you have a mortgage, sold a house, or invest in stocks/bonds, the answer is still probably yes. It is important to note most "free for military" tax return filing services make it free for military as long as you are filing only a W-2 by yourself. You will be charged for anything more complicated.
No, if:
You or your spouse own a business or have some other form of non-W-2, non-1099, non standard form income.
Note that in almost any case where the answer is no, it is probably best to consult a local accountant, rather than use automated third-party software.
Possibly No, if:
Certain unique circumstances, such as: a married couple- that lives in a house that is registered to only one of couple- where the house still has a mortgage payment. In this completing a 'married-filing separately' could save some money.
What do I need:
All W-2 forms for yourself (and spouse). These are provided by your employer in early January. For the military, they are available at the DFAS MyPay website, next to where you find your regular LES.
All 1099 forms- you get these from your bank, they detail interest you earned over the year.
Each person's Social Security Number, Driver's License Details, and previous year's Tax Pins (5-digit numbers for each person). If you lost your pin, there are ways to recover it through the IRS website during the filing process.
Final Notes:
The standard deduction for 2023 is $12,950 for single and $25,900 for married filing jointly. It is rare for anyone in the military to amass sufficient non-dependent deductions that the exceed these values.
YouTube and the instructions are your friend. If you are unsure of something, someone has probably already described a solution on youtube. Also, the official instructions were written by tax professionals, not lawyers. They are more clear than one might expect.
The below video is a good starting point to learn about the process in further detail.
A Brief Applied History of Tax Filing in the United States
In the pre-digital era, going back to the 1920s, taxpayers were required to submit income tax forms by mail to a regional tax office. Any mistake found by IRS auditors could take weeks to be returned by mail, and was an unimaginable headache. So, it was wise to have the forms filled out by a local accountant- who might even use a typewriter to make the forms more legible.
The digital era and the internet brought incredible ease to Americans filling out their tax forms. However, the popular mindset of using a third party to fill out the forms remains. While tax-form-preparation companies still provide a more user-friendly experience, the IRS website has improved to the point where users can immediately be informed if they made a mistake, and re-file just as quickly as when using a third party.
It is important to note, that for the majority of the history of the United States, income tax has been unconstitutional (157 U.S. 429, 1895). The levying of corporate or personal income tax was only made legal with the ratification of the 16th Amendment to the US Constitution in 1913.