Tax breaks, benefits available to military families

As we honor our armed forces this Veterans Day, let's also acknowledge the financial challenges they and their families often face, both while in service and after discharge. Fortunately, service members needn't go it alone: Many tax benefits, social services and financial assistance programs are available to help.

Special tax benefits for active duty personnel include:

• If you move because of a permanent change of station, you may be able to deduct unreimbursed moving expenses.
• If you serve in a combat zone for any part of a month, any military pay you received during that month is not considered taxable income.
• You can also include nontaxable combat pay as "earned income" when claiming the Earned Income Tax Credit for low- to moderate-income earners.
• Deadlines for filing tax returns, paying taxes, filing refund claims and taking other actions with the IRS are automatically extended for qualifying military members.
• Joint tax returns generally must be signed by both spouses. But, when one spouse is unavailable due to military duty, you may use a power of attorney to file a joint return.
• If you're an armed forces reserves member, you can deduct unreimbursed travel expenses for travel more than 100 miles from home to perform reserve duties.
• As you transition to civilian life, you may be able to deduct certain job-hunting costs.
• Most military installations offer free tax-filing and preparation assistance during and/or after tax filing season.
• The IRS's Armed Forces' Tax Guide provides an excellent summary of many important military-related tax topics (www.irs.gov).

A few suggestions and precautions for military families facing financial challenges:

• Each base command offers free financial specialists to discuss personal finances and help with budgeting; many banks and credit unions also offer these services.
• Each military branch has a relief society and many grant emergency loans. Turn to them first before taking out a payday loan.
• Check-cashing outlets, pawn shops and other lenders are prohibited from charging more than 36 percent interest to military families for payday loans.
• If you do go off-base for financial assistance, you're responsible for disclosing your military status in order to receive military rates.
• Before signing loan documents, make sure you fully understand all conditions (annual percentage rate, monthly payment amount, fees, penalties, etc.) Don't hesitate to take the paperwork home to think it over or consult with a financial advisor.
• Avoid pawn shop loans that use your car's title as collateral. Besides paying a very high rate, missing a payment could cost you ownership of your car.

Many governmental and private organizations provide financial information aimed at the special needs of the military, including:

• The Consumer Financial Protection Bureau's Office of Servicemember Affairs (www.consumerfinance.gov/servicemembers) features a variety of financial planning tools.
• Military OneSource (www.militaryonesource.mil) helps service members and families juggle such concerns as money management, spouse employment, education, parenting, childcare, relocation and deployment.
• SaveAndInvest.org, a financial education program created by the Financial Industry Regulatory Authority to improve military members' saving and investing knowledge (www.saveandinvest.org/MilitaryCenter).
• The GI Bill provides a broad range of education benefits for veterans (www.gibill.va.gov).
• The government provides an intensive, three-day Transition Assistance Program for separating or retiring service members and spouses to ease reentry into the civilian workplace (www.taonline.com/TAPOffice).

It's vital that our military understand the benefits available to them – as well as the financial pitfalls to which they may be vulnerable.