Don't Mess With Taxes

Memorial Day weekend is a day of recreation for most of us. But we get to enjoy our time off in part because others served in the Armed Forces.

The ultimate sacrifice of those military service personnel is the real reason for Memorial Day remembrances every May.

And while losing a loved is an unthinkable, difficult situation, survivors of service members do get some special tax considerations.

Tax-free benefits, forgiven tax claims: Survivors of deceased Armed Forces members are provided a $100,000 payment. This amount is not taxable.

Military survivors also might qualify for tax forgiveness. This situation occurs, notes Military.com, when a member of the U.S. Armed Forces dies while in active service, either in a combat zone or from an injury or disease.

In these cases, the IRS forgives the soldier's income tax liability in full for the tax year in which the death occurred. That means there is no tax due.

The tax liability is also forgiven for any previous tax year ending on or after the first day the member served in a combat zone in active service. Any tax liability that may be owed at the time of death will be forgiven, and any tax liability paid after the date of death will be refunded.

In some cases, military survivors must make a claim for tax forgiveness related to the loss of their spouse.

IRS Publication 3, Armed Forces' Tax Guide, discusses the steps, starting on page 26, to file for tax forgiveness. As with all tax matters, there is required documentation and deadlines to meet. Plus, the return or claim involving tax forgiveness must be done by hand, not electronically filed.

Given all the other matters that must be dealt with after losing a loved one, it's a good idea to get professional help in filing a deceased spouse's final return (military or civilian) or claiming tax forgiveness.

Filing status change: A military spouse who lost his or her Armed Services partner also, like any civilian taxpayer, has filing status issues to decide.

A surviving spouse can file a joint return for the tax year in which his/her spouse died.

A surviving military surviving, again like any taxpayer, subsequently might be able to use the Qualifying Widow or Widower with Dependent Child filing status. This applies where a taxpayer recently lost his/her spouse and is caring for a dependent child. The surviving spouse filing option is available for the two years following the year a spouse dies and essentially provides the same benefits as the married joint filing status.

You also should check out Military.com's article for additional tax benefits for those who've lost Armed Forces loved ones.

Condolences on your loss, and sincere thanks for your family member's sacrifice, on this Memorial Day and every day.

You also might find these items of interest:

• Musical Memorial Day 2019
• Don't overlook state tax breaks for military personnel
• Remembering military families, too, on Memorial Day 2020

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