Military Tax Tips & Tricks: Filing Taxes Overseas

This post is the last in a three-part series covering tax tips and tricks for military members.

Military taxes

Filing a tax return overseas can be easy.

This piece covers filing during a deployment and the different options you have while you’re overseas.

One of the biggest setbacks for military families trying to file their taxes on time is collecting all of the necessary information and signatures during a deployment. Thankfully there are some ways to combat these difficulties and services to be aware of that help you file during a deployment.

Power of Attorney

The easiest way to deal with taxes during deployment is to establish your power of attorney beforehand. Switching your power of attorney may seem like a daunting task, but it’s typically a simple one you can knock out in a few days.

The attorney in fact will be able to file your taxes for you if you will be deployed during tax season. If you will be returning right before tax day though, be sure to resume your power of attorney and file your taxes on your own.

Check out Military Family Central to learn more about the concept of attorney in fact.

Filing During Deployment

If for some reason you haven’t switched your power of attorney before you left and need to file your taxes, there are some services online that allow you to file electronically for free.

The MilitaryOneSource free filing service mentioned in our first military tax article should allow service members to file their taxes during deployment.

Delays

If you’d rather experience the joy of filing your taxes yourself, you can always apply for a tax extension due to a deployment.  An automatic two-month extension is given to those who are stationed or living outside of the U.S. and Puerto Rico on tax day.

Taxes Overseas

Many spouses living with a deployed service member in countries like Germany are concerned about foreign incomes and filing taxes. First and foremost recognize that you will have to file some type of return to report your worldwide income.

The good news is that filing overseas is essentially the same as if you were living in the states.  You still follow the income guidelines associated income within the U.S. and must file by tax day.

Thanks to the digital age, tax forms can be downloaded online from the IRS website and filed electronically and or mailed via the U.S. Postal Service. Here are some tips for overseas taxpayers:

  • Avoid double taxation by claiming your foreign taxes in your deductions and filling out the 4868 form, which enacts tax treaties the U.S. has with many foreign countries to avoid overtaxing international citizens.
  • Remember that exchange rates are important when it comes to filing foreign taxes. Use the updated IRS exchange rates to calculate accurately.
  • Make sure you pay all taxes owed by the June 15th extended deadline to avoid penalty fees and interest charges.

No matter where you file your taxes, be sure to finish them on time. Tax Day is April 15th.

 

Photo courtesy of 401K