Tax Credits for Military Families: Supporting Those Who Serve
Military families make an immense sacrifice for our country. They leave behind their homes, their friends, and their livelihoods to defend our nation from threats both foreign and domestic. Despite their heroic efforts, many of these families struggle to make ends meet on a day-to-day basis. To help alleviate the financial burden that plagues military families, the US government offers a variety of tax credits and deductions. In this article, we'll explore these tax benefits and how they can support those who serve.
Housing-Related Tax Credits
One of the most significant expenses that military families face is housing. Fortunately, there are several tax credits and deductions that can help make housing more affordable. For example, military families who own their homes may be eligible for the mortgage interest deduction. This deduction allows homeowners to subtract the amount they pay in interest on their mortgage from their taxable income. This can result in significant tax savings over the life of the mortgage.
Additionally, military families who are stationed overseas may be eligible for the foreign housing exclusion. This credit allows service members to exclude their housing expenses from their taxable income if they are stationed in a country with a high cost of living. This exclusion can be a substantial benefit for families who are stationed abroad, as it can help offset the high cost of housing in some overseas locations.
Child-Related Tax Credits
Another significant expense that military families face is the cost of raising children. To help alleviate this burden, the government offers several tax credits and deductions related to children. The child tax credit is a credit that can be claimed for each qualifying child under the age of 17. The credit is worth up to $2,000 per child, and it is partially refundable. This means that families who owe less in taxes than the credit is worth can receive a refund for the difference.
Additionally, military families who pay for childcare while they work may be eligible for the child and dependent care credit. This credit helps offset the cost of childcare by allowing families to deduct a portion of their expenses from their taxable income. The credit can be worth up to $2,100 for families with multiple children, and it can be a significant benefit for families who rely on childcare while they are on active duty.
Education-Related Tax Benefits
Military families who pursue higher education can also benefit from several tax credits and deductions. The American Opportunity Tax Credit is a credit that can be claimed for the first four years of college. The credit is worth up to $2,500 per year, and it can be partially refundable. This credit can be a substantial benefit for military families who are looking to enroll their children in college or who are pursuing higher education themselves.
Additionally, military families who use the GI Bill to pay for college may be eligible for the tuition and fees deduction. This deduction allows families to deduct up to $4,000 from their taxable income for college tuition and fees. This deduction can be claimed by the service member or by their spouse, and it can help offset the high cost of tuition at some colleges and universities.
Conclusion
Military families make a significant sacrifice for our country, and they deserve our support. Fortunately, the US government offers several tax credits and deductions that can help alleviate the financial burden that plagues many military families. From housing-related tax credits to education-related tax benefits, these tax breaks can help support those who serve and their families. If you are a military family, be sure to explore these tax benefits and take advantage of them if you are eligible.