Tax Deductions for Military Reserves

Military reservists can access several federal tax deduction incentives.

The Internal Revenue Service offers tax incentives for members of the U.S. Military Reserves or National Guard. These deductions reduce the amount of gross taxable income payable to the U.S. government. Eligible tax deductions include travel expenses, home office expenses, magazine or book subscriptions related to a reservist's professional military service and tax exemptions on early Individual Retirement Account withdrawals.

Travel Expenses

Members of the U.S. Military Reserve and National Guard can claim travel expenses related to their reservist duties. The tax deduction reduces a reservist's adjusted gross income, lessening the amount of federal tax payable. To claim the tax deduction, eligible reservists must travel more than 100 miles from their home for service-related duties, for at least an overnight period. The deduction is for necessary expenses only, such as meals, accommodation and other incidentals. Reservists are reimbursed at the federal per diem rate for meals and accommodations, and the standard mileage rate for transportation-related expenses. Reservists must complete federal Form 1040 to qualify for the tax deduction.

Home Office

Military reservists who work from home as part of their military service duties can claim a tax deduction for the establishment of a home office. To meet IRS requirements, the reservist must use the home office on a consistent basis as a principal place to meet with clients, conduct business or perform administrative duties related to his military service. The home office must serve as a separate and exclusive space from other areas of the house, such as the family room. Eligible home office deductions include utilities, household expenditures such as mortgage or homeowner association fees, office supplies and Internet access.

Magazine Subscriptions

Resource materials such as books, magazines and online subscriptions are tax deductible. Reservists are eligible to claim resources they purchase that support their military service or aid in their job search. The materials must relate to the work that the military reservist performs.

Early IRA Withdrawals

Military Reserve members are eligible to make early withdrawals from their Individual Retirement Account and 401 (K) accounts without paying any tax penalties. Eligible reservists must have had an active call to duty for 180 days or more, following Sept. 11, 2001. Reservists must make the withdrawal while on active duty to qualify for the tax exemption.

References

• Internal Revenue Service: Topic 511 Business Travel Expenses
• Turbo Tax: Serving Uncle Sam Tax Breaks for the Military
• Military.com: The 11 Most Overlooked Tax Deductions
• Milspouse.com: Tax Deductions 101 for Guard and Reserve

Resources

• Internal Revenue Service: Highlights: Military Family Tax Relief Act
• Internal Revenue Service: Publication 3 (2010) Armed Forces Tax Guide
• Internal Revenue Service: U.S. Individual Income Tax Return