Military members need a robust tax solution to keep up with complex tax situations. TurboTax can handle your tax needs – and there is a TurboTax military discount.
Intuit offers TurboTax online free of charge for enlisted military members, including active duty and Reserve.
See below for more information about TurboTax and its military discount.
TurboTax Can Handle Complex Military Tax Issues
Anyone who has ever served in the military knows how complicated military pay and benefits can be. The service member’s base pay is only part of the story, with service members also earning a variety of non-taxable pay and benefits such as basic allowance for subsistence, basic allowance for housing, incentive pays, and other compensation. Earning tax-free combat zone pay can also impact both your state and federal tax returns.
To top it off, many military members and their spouses have unique tax situations based on self-employment income, real estate rental income, or possibly even having to file more than one state tax return due to a recent relocation or based on their state of residency.
When you add all this up, it can make for one fairly complicated tax return.
Intuit, the maker of financial products such as TurboTax, Quicken, and Mint.com, has one of the top tax software programs on the market. And they offer a military discount for enlisted active duty and Reserve service members.
I’m happy to see TurboTax took notice of the complexities many of our service members face and created a solution. Let’s take a look at TurboTax features and the details of their military discount.
Best Tax Software of 2023
Still need to file your tax return? Check out some of the best online tax software programs of 2023 below.
Rather file your taxes in-person? H&R Block is offering an exclusive $25-off discount for readers of The Military Wallet with coupon code 61557.
TurboTax Features
Several years ago, TurboTax created TurboTax Military Edition. This software version was created specifically for military members and included features to account for common tax issues faced by many service members. These features are now baked into the main software version.
Completing your tax return and filing your taxes with TurboTax is easy. The software guides you through a series of questions designed to maximize your return.
The questions will cover many issues military members may not know could affect their tax returns, such as state of residency, filing tax returns in multiple states, combat– pay questions, tax-free benefits such as BAH and BAS, deductions for uniforms, expenses related to a permanent change of station moves, dependents, special tax provisions for earned income tax credits and much more.
TurboTax Versions
TurboTax offers several versions of its software. Which version you choose depends entirely on the complexity of your return and your needs.
Here are the basic details (visit the TurboTax site for a more detailed overview):
- Free Edition: While this edition is free to file federal taxes, it only covers simple tax returns, including the 1040EZ and 1040A, and not all taxpayers qualify.
- Deluxe: This edition maximizes your deductions and returns and makes it easy to claim a variety of deductions and tax credits.
- Premier: This version is ideal if you have investment income, rental property income, and other more advanced needs.
- Self-Employed: This version is for those who have personal and business income and expenses.
Choosing the Best TurboTax Version for Your Needs
Each version includes the features found in the previous versions, so you can start your return online for free with one of the lower versions, and upgrade as needed. The good news is you don’t have to pay until you file your return. If you start with the free edition and find you need to upgrade, just continue with your return. The TurboTax online software automatically saves your information as you go. With the military discount, you can file both federal and state taxes for free, regardless of which version you use.
TurboTax Military Discount Details
TurboTax offers military discounts based on your pay grade. Simply upload a copy of your W-2 (find out when military tax forms are available through myPay), and verify your rank. TurboTax will automatically apply your discount when you file your taxes. You can file both your federal and state taxes for free regardless of which online version you use (free edition, deluxe, premier or self-employed).
Please note: This discount offer applies only to TurboTax online programs.
TurboTax offers a free edition to everyone, which may be sufficient for your needs. As noted above, you can always start with the free version and upgrade if needed. If you don’t qualify for the military discount, you only pay if you upgrade and only when you file your return.
The military discount is for all enlisted ranks (E-1 through E-9) – active duty and Reserves – with a W2 from DFAS.
All enlisted ranks currently serving active duty or in the Reserves qualify for the military discount. You’ll receive free federal and state filing with any of the online editions of TurboTax: Free edition, deluxe, premier or self-employed.
Military Tax Filing Tips from TurboTax
- Combat pay: Pay received in combat zones is exempt from federal taxes.
- Special provisions for earned income tax credit (EITC): Military members can elect to use non-taxable pay in order to be eligible for the EITC credits. (This can result in substantial savings!)
- Moving deductions: Active-duty service members may be able to deduct reasonable un-reimbursed moving expenses if the move is for a required PCS.
- Travel deductions: National Guard and Reserve members may be able to claim unreimbursed travel expenses if they travel more than 100 miles away to perform required duties (more info on deducting travel for Reserve duties).
- Uniform deductions: National Guard and Reserve members may be able to deduct the cost and maintenance of uniforms if they are not allowed to wear certain uniforms when off-duty.
- Waived penalties: If a military member is called to active duty and it causes financial hardship, they are able to waive the 10% penalty tax for early withdrawal from an IRA or another retirement account.
- Job search expenses: Military members transitioning to civilian life may be able to deduct expenses related to their job searches, such as travel, resume preparation, and outplacement agency fees.
Based on personal experience, I would also like to add that military members should consider:
- Retirement and investment contributions: Contributions to the Thrift Savings Plan, IRAs, and other retirement or investment accounts may be affected by tax-free income earned in combat zones.
- Bonuses, incentive pay, and other benefits: These should also be considered when filing your tax return with TurboTax or any other software program.
- Guard and Reserve members: You may have other deductions in addition to the travel expenses listed above.
- Filing deadlines: Military members who are serving overseas may be eligible for a free tax deadline extension due to their overseas service.
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Noah says
New from TurboTax Military for 2023: National Guard components are now excluded. After 6 years of free filing and recommending them, NO MORE. that was a really sleazy move Intuit. And cherry-picking the NG, which is a reserve component? Come on.
I’m switching to MilTax now, which is Military OneSources free online military-specific tax prep. It’s a pain to re-enter everything but it’s a matter of principle. If they had been upfront about it and just said “we can’t offer this for free to Military anymore, but $20 will cover it” I’d be fine.
Deven says
What they don’t tell you…Or what’s in the fine print…is it doesn’t apply to National Guard. Even though the National Guard is a Reserve Component. Pretty trashy.
Anton Ivanov says
I am curious to see if there are that many differences between TurboTax Military Edition and the regular version. While serving on active duty, I have always used TurboTax (regular edition) to file my taxes without any problems.
I know that TurboTax offers free federal return filing (most service members will probably have a simple tax return), so the price on the Military Edition seems fairly steep. I see that it’s discounted for junior enlisted now, but who knows what it will be next year.
Ryan Guina says
Anton, I use an accountant now, because my business makes taxes a little more complicated than I would like. But I spoke with some people at TurboTax about this new product and it had a few items that were tailored to military members. For example, it automatically prompted the user for certain questions regarding deployments, living in more than one state, purchasing uniforms or other required items (sometimes tax deductible, even with the uniform allotment), PCS in the previous year, travel related items, and a couple more items. Overall, I think it’s a good solution for most military members. Taxes can get complicated!