Many retired Senior Military Officers get a big surprise when they file their tax return for their first full year in retirement. They often end up paying a significant amount more to settle their tax bill.
Over a career many military officers accumulate at least one rental property. The sale of that property can generate a pretty big tax bill. By using a 1031 exchange you can defer the tax bill on the sale. But make sure you work with a financial planner or tax advisor that understands the unique military tax benefits available to you.
Military officers, as well as other taxpayers, will often sell securities at a loss to reduce their tax bill. That is a valid tax avoidance technique. However, while executing this strategy, make sure you don't run afoul of the wash sale rules.
It is possible that in certain circumstances a retired military officer will be unable to file an amended tax return in time to correct for unreported VA offsets from retired pay. If this situation presents itself, make sure you file a protective claim.
Generally speaking service academy cadets and midshipmen have all their education expenses covered with the exception of books. This exception, combined with the fact that it is unlikely that their parents can claim them as dependents opens the door for the American Opportunity Credit.
Near the end of your career as a military officer or perhaps after you retire, you may inherit an IRA. The tax rules are complicated and a mistake can be very costly. Make sure you understand these four rules, as a minimum.
Disclaimer
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