Financial Ace 1040 LLC

Military Tax Services

Tax preparation built around military life.

From combat pay exclusions to PCS move deductions, we handle the tax situations unique to active duty service members, veterans, and military families.

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What this service covers

Military tax service covers the full range of situations that come with service — non-taxable allowances, deployment extensions, multi-state filings, and spouse employment issues that standard tax software often gets wrong.

01

Military income & allowances

We correctly handle combat pay exclusions, non-taxable BAH and BAS allowances, hazardous duty pay, and special pays so your taxable income is calculated right from the start.

02

PCS moves & uniform deductions

Permanent Change of Station moving expenses remain deductible for active duty members — unlike civilians post-TCJA. We also capture uniform and unreimbursed expense deductions where they apply.

03

Deployment & extension filing

Service members in combat zones receive automatic filing deadline extensions. We manage those deadlines, back-dated returns, and any penalty abatement situations that arise from deployments.

04

Multi-state & domicile issues

Your legal domicile state and your duty station state may be different — and each has its own rules. We sort out which state gets taxed what, and apply SCRA protections where you qualify.

05

Military spouse tax relief

Under the Military Spouses Residency Relief Act, a spouse may maintain their home state residency for tax purposes. We apply this correctly so spouses aren't double-taxed on the same income.

06

VA disability & retirement pay

VA disability compensation is not taxable. Military retirement pay is — but at specific rates with available deductions. We make sure each income type is classified and reported correctly.

Frequently asked questions

Is combat pay taxable?

No. Combat pay received while serving in a designated combat zone is excluded from federal taxable income. However, you can elect to include it if doing so increases an earned income credit. We review which option benefits you most.

Are BAH and BAS allowances taxable?

No. Basic Allowance for Housing (BAH) and Basic Allowance for Subsistence (BAS) are not included in your taxable income and do not need to be reported as wages on your federal return.

Can I deduct PCS moving expenses?

Yes. Active duty service members who move due to a Permanent Change of Station order can still deduct qualified moving expenses — this exception was preserved for military members when the civilian moving expense deduction was suspended by the Tax Cuts and Jobs Act.

Which state do I file in if I'm stationed away from my home state?

Under the Servicemembers Civil Relief Act (SCRA), active duty members generally pay taxes only to their legal domicile state — not the state where they're stationed. We sort out which state return(s) are required and apply the correct exemptions.

Does my spouse have to pay taxes in the state we're stationed in?

Under the Military Spouses Residency Relief Act (MSRRA), a military spouse may be exempt from income tax in the duty station state if they maintain the same legal domicile as the service member. We apply this relief correctly to avoid double taxation.

Is VA disability compensation taxable?

No. VA disability compensation is not subject to federal income tax and should not be reported as income on your return. Military retirement pay, however, is taxable — though specific deductions and exclusions may apply depending on your situation.

What happens to my tax deadline if I'm deployed?

Service members serving in a combat zone automatically receive at least a 180-day extension from the last day of combat zone service to file and pay taxes. We manage these deadlines and can handle back-dated returns or penalty abatement if needed.

Still have questions?