Tax prep at H&R Block or a CPA runs $200–$400. Military members qualify for free filing through at least three separate programs — most of which handle military situations better than TurboTax’s free tier anyway.
Three ways to file for free
MilTax is the DoD’s free software, available to all active duty and eligible veterans within 365 days of separation. It handles federal plus up to three state returns and is built for military-specific situations — combat pay exclusions, PCS moves, SCRA — that general-purpose software often gets wrong or charges extra for. Access at militaryonesource.mil under “MilTax.”
VITA (Volunteer Income Tax Assistance) sites on most installations provide free in-person prep by IRS-certified volunteers. Income limits apply but most junior enlisted qualify. Appointments fill by early February — book through your finance office now.
IRS Free File at irs.gov/freefile offers free federal returns for anyone under $84,000 AGI (2024 tax year threshold — verify the current year limit at the site). Commercial partners include TaxAct and FreeTaxUSA.
Combat pay exclusion — verify it was applied
Serving in a combat zone excludes your pay for those months from federal income tax: base pay, special pays, and bonuses. It should appear correctly on your W-2. Verify it was applied — especially if you received a promotion or bonus during deployment. The authoritative reference is IRS Publication 3 (Armed Forces’ Tax Guide) at irs.gov.
EITC and combat pay: one election that changes your refund
The Earned Income Tax Credit is one of the largest refundable credits available. By default, tax-exempt combat pay is excluded from income, which can lower your EITC because your “earned income” looks smaller. You can elect to include combat zone pay as earned income specifically for EITC calculation — it stays tax-free either way, but the election can significantly increase your refund.
Run both calculations in MilTax or have VITA check it. Getting this wrong costs real money.
PCS move deductions
The 2017 Tax Cuts and Jobs Act suspended moving expense deductions for civilians. Military members retained them. Eligible unreimbursed expenses include travel to the new duty station (one trip per family member) and household goods moves beyond the government-paid allowance. You cannot deduct anything the government already reimbursed — only out-of-pocket costs. Keep receipts. File on Form 3903.
Savings Deposit Program — 10% guaranteed, tax-free
Deploying to a combat zone: the SDP lets you deposit up to $10,000 at a guaranteed 10% annual rate, and the interest is tax-exempt. Open it through finance within 30 days of arriving in a qualifying zone. A guaranteed 10% tax-free return is not something civilians can buy at any price.
Common errors on military returns
BAH and BAS are not taxable — they shouldn’t appear on your W-2. If they do, contact finance immediately. TSP Roth contributions from combat zone pay are contributed tax-free and grow tax-free — a double benefit worth confirming with finance if you’re deployed. State taxes during deployment depend on your state of legal residence; verify with your state’s tax agency whether a combat zone exemption applies.
The reference that matters
Everything military-specific — combat pay exclusions, SDP rules, SCRA interactions, PCS deductions — is in IRS Publication 3. General tax guidance gets military situations wrong often enough that Publication 3 should be your first check, not your last. The preparation is free. The mistakes aren’t.