Skip to main content

Tax Lessons Learned as a Military Spouse

  Over the past 10 years having been a military spouse, I have learned a few lessons when it comes to taxes and fees when you move to a new location:

  • Some employees, whether they work in HR at your new job or at the local DMV may not know the exemptions and rights that you have as a military spouse or dependent.  When someone tells you no on exempting you from a fee or tax, I have reference material or a good CPA on hand.  They may not interact with military members very often and are not aware of current laws.
  • Be sure your employer has the correct military exemption forms when filling out your W-4.  In my experience, even when your human resource representative says they have what they need, it is likely they do not. Several times I had to fill out local city and state military withholding forms that my human resource department failed to provide. 
  • When possible I have my vehicles titled in my spouse's name so that I am exempt from local property taxes without having to dig for exemptions for dependents.
  • In South Carolina, when we moved I was able to keep the resident rate property tax rate since we were upside-down and could not sell our home.  I make sure to check the local real estate tax laws when moving.
  • Zero down VA loans are great BUT:
    • There is a funding fee that is higher than most lenders that you will pay at closing.
    • I found if you want to refinance again through the VA, this fee doubles and usually you will not save any money.
  •  I was able to take a loan from our Thrift Savings Plan or my personal retirement fund to make a down payment on a mortgage with better interest rates than a VA loan.
  • When my wife were in Texas, we immediately made this our 'home of record' because this saves us in state income taxes. I would have done the same if I were in Washington, Florida, Wyoming, Alaska, Tennessee, New Hampshire, South Dakota, or Nevada.  
  • When filing taxes, I found that sometimes it was in my best interest to file a return in my current state, even if I owed nothing.
  •  When we decide to retire, we need to pick a state with the lowest tax burden overall.  Here is a good article: www.investopedia.com

Comments

Post a Comment

Popular posts from this blog

Taxing Tactics: Navigating the Military's Tax Filing Battle

In the bustling military base of Fort Valor, the soldiers were renowned for their precision in combat, but when it came to filing their federal income taxes, even the most disciplined among them stumbled. As tax season approached, a group of friends, Sergeant Alex, Corporal Mia, and Private Jake, found themselves in a whirlwind of confusion and misconceptions. Sergeant Alex, the battle-hardened veteran, thought he had everything figured out. He believed that since he lived on base, he was automatically exempt from paying taxes. Confidently, he skipped over crucial tax forms and failed to report his military pay accurately. Little did he know that while he might be exempt from certain state taxes, federal taxes still applied. Corporal Mia, known for her attention to detail, made a common mistake that many military members faced. She underestimated the importance of keeping track of her moving expenses. When she received orders for a new duty station, she assumed her expenses would b...
Post a Comment
Read more

Military Reference

  Military Spouses Residency Relief Act - November 2009 Military Dependents can keep their 'home of record' when required to move due to military orders. This avoids issues with having to pay state income and property taxes to 2 states at the same time.      
Post a Comment
Read more