Free tax service for cadets

Blueman

Member
We've been going to our CPA for DS's tax until last year but we wanted him to file on his own starting this year. We know that turbo tax military is free but we also read in places that H&R Block has free filing for military too. We've never used either, but any recommendations? Also, are there any cadet specific glitches to lookout for? They ARE considered active military, right?

Can they itemize and deduct anything education related or is it not allowed since government pays them technically for everything? What about state of residence? Even if they stay at school 90% of the time, do they still use home residence for state tax? Any other cadet specific tax advice for first timers would be greatly appreciated. I leave everything to my CPA, so I'm not much of a help. Thank you for any advice!

By the way, those of you who've already tried, what are the differences in turbo tax freedom vs turbo tax military? Is the military version a lot more military specific, catered to their needs?
 

kinnem

Moderator
5-Year Member
Turbo Tax military is only free for E1-E5. Other ranks receive a discount. Not certain whether midshipmen/cadets would qualify.
The IRS would not allow them to deduct anything education related unless they are paying for it, and they're not. (Not sure about books though).
DS was not at an academy, but as an active duty Marine he uses his address of record (our home) for tax purposes, so I assume the same would apply to your DS. Turbo Tax Military home page seems to indicate that it takes into account things that are military specific... but you know how marketing works.

Can't speak to H&R Block.
 

Capri120

Parent
Turbotax is free for USAFA Cadets, so I would think it would be for other Cadets and Mids as well. DD did hers this year, federal and state.
 

Blackbird

Parent
5-Year Member
Mids and cadets do qualify for free TurboTax. Per TurboTax, they should input E5 as there is no way to input a mid/cadet rank.
 
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ktnatalk

Sailor. Shipmate. Parent.
Mids and cadets do qualify for free TurboTax. Per TurboTax, they should input E5 as there is no way to input a mid/cadet rank.
I think my 2/C DD put down O-1 in Turbotax. A bit premature but the program doesn't care. I'd put down O-1 vice E-5 too if I were her.
 

Blueman

Member
Haven't looked at the program yet but wouldn't the pay for E-5 or O-1 be far more than cadets' ? Does it matter at the end? As I stated, I've used our CPA until now and that information was never asked. Is it just a Turbo Tax thing?

Slightly off subject, I've got a friend who's two kids go to SA's, but he's claiming them both dependents all four years. How can that be? He says his CPA said it was fine. Is there a legitimate way to do that, or are they doing something wrong?
 

ktnatalk

Sailor. Shipmate. Parent.
Haven't looked at the program yet but wouldn't the pay for E-5 or O-1 be far more than cadets' ? Does it matter at the end? As I stated, I've used our CPA until now and that information was never asked. Is it just a Turbo Tax thing?

Slightly off subject, I've got a friend who's two kids go to SA's, but he's claiming them both dependents all four years. How can that be? He says his CPA said it was fine. Is there a legitimate way to do that, or are they doing something wrong?
The paygrade doesn't matter. Their tax is based on their W2. Two service members (officer or enlisted) in the same paygrade can have a very different W2 if one is receiving a large sum of incentive pay (e.g. one is a doctor with a specialty).

Here is what the JAG put out to the Midshipmen at the tax brief last Thursday. I hope your friend and his CPA are ready if he gets audited.

Some Fourth Class Midshipmen may be claimed as dependents on their parents’ return.
– Must have lived with parents for 6 months prior to Plebe Summer
– If your parents plan to claim you, you cannot claim yourself.
 Other class years should not be claimed by parents.

*Edit: They are literally getting paid and have free room and board for the entire year starting 1 Jan of their first year!

If your friends' kids are attending USNA, ask him to ask the kids for the 44-page brief emailed to the entire Brigade by the Midshipmen Financial Officer. It also has screenshots of the steps using a free tax program.
 
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Blueman

Member
The paygrade doesn't matter. Their tax is based on their W2. Two service members (officer or enlisted) in the same paygrade can have a very different W2 if one is receiving a large sum of incentive pay (e.g. one is a doctor with a specialty).

Here is what the JAG put out to the Midshipmen at the tax brief last Thursday. I hope your friend and his CPA are ready if he gets audited.

Some Fourth Class Midshipmen may be claimed as dependents on their parents’ return.
– Must have lived with parents for 6 months prior to Plebe Summer
– If your parents plan to claim you, you cannot claim yourself.
 Other class years should not be claimed by parents.

*Edit: They are literally getting paid and have free room and board for the entire year starting 1 Jan of their first year!

If your friends' kids are attending USNA, ask him to ask the kids for the 44-page brief emailed to the entire Brigade by the Midshipmen Financial Officer. It also has screenshots of the steps using a free tax program.
Hahaha... one AT USNA, other at USCGA. I thought some people knew some tax secrets I Was missing out on and was gonna ask for his CPA but better not dream of claiming our kids after first year.
 

kinnem

Moderator
5-Year Member
The paygrade doesn't matter. Their tax is based on their W2. Two service members (officer or enlisted) in the same paygrade can have a very different W2 if one is receiving a large sum of incentive pay (e.g. one is a doctor with a specialty).

Here is what the JAG put out to the Midshipmen at the tax brief last Thursday. I hope your friend and his CPA are ready if he gets audited.

Some Fourth Class Midshipmen may be claimed as dependents on their parents’ return.
– Must have lived with parents for 6 months prior to Plebe Summer
– If your parents plan to claim you, you cannot claim yourself.
 Other class years should not be claimed by parents.

*Edit: They are literally getting paid and have free room and board for the entire year starting 1 Jan of their first year!

If your friends' kids are attending USNA, ask him to ask the kids for the 44-page brief emailed to the entire Brigade by the Midshipmen Financial Officer. It also has screenshots of the steps using a free tax program.
I thought the reference to pay grade on this thread was in the context of qualifying for the free "Turbo Tax Military" which is only free for E1=E5. It certainly had nothing to do with what one's tax obligation would be. On a related note, NROTC midshipmen who attend USMC OCS (Bulldog) are paid at the E5 pay grade. I think regardless of what any midshipman gets paid, they are considered to be at the E5 pay grade, which is why they get Turbo Tax Military for free... but of course at least some of this is surmise on my part.

Suffice it to say, based on other posts on this thread, it's use is free to cadets and midshipmen.
 

ktnatalk

Sailor. Shipmate. Parent.
I thought the reference to pay grade on this thread was in the context of qualifying for the free "Turbo Tax Military" which is only free for E1=E5. It certainly had nothing to do with what one's tax obligation would be. On a related note, NROTC midshipmen who attend USMC OCS (Bulldog) are paid at the E5 pay grade. I think regardless of what any midshipman gets paid, they are considered to be at the E5 pay grade, which is why they get Turbo Tax Military for free... but of course at least some of this is surmise on my part.

Suffice it to say, based on other posts on this thread, it's use is free to cadets and midshipmen.
It is free and not just for E1-E5. Maybe it has a cost if you have a more complicated one, say, itemized your deductions. Here is the link in that brief:

http://militaryonesource.mil/financial-and-legal/taxes?content_id=295240

USNA Midshipmen's LES (Leave and Earning Statement) says C-1 paygrade, not E-5. I have no experience with ROTC.
 

ktnatalk

Sailor. Shipmate. Parent.
Hmmm I seriously don't know but I don't even want to bring it up to upset him at this point. We had a discussion before and he was pretty set in his decision. I'll just make sure I'm careful with mine.
If he is your friend, maybe you should reconsider... but I digress.
 

kinnem

Moderator
5-Year Member
It is free and not just for E1-E5. Maybe it has a cost if you have a more complicated one, say, itemized your deductions. Here is the link in that brief:

http://militaryonesource.mil/financial-and-legal/taxes?content_id=295240

USNA Midshipmen's LES (Leave and Earning Statement) says C-1 paygrade, not E-5. I have no experience with ROTC.
It is free and not just for E1-E5. Maybe it has a cost if you have a more complicated one, say, itemized your deductions. Here is the link in that brief:

http://militaryonesource.mil/financial-and-legal/taxes?content_id=295240

USNA Midshipmen's LES (Leave and Earning Statement) says C-1 paygrade, not E-5. I have no experience with ROTC.
I'm not arguing with the brief. I've accepted that the cadets and midshipmen get to use it for free. Hell I've never seen and didn't even know there was a brief. Stupid me, I was simply quoting the Turbo Tex Military web site found here: https://www.turbotax.com/lp/ty16/ppc/military.htm?srqs=null&cid=ppc_gg_b_stan_all_na_TurboTax-Military_ty16-bu2-sb13&srid=CPHr_tW3w9ICFSh3MgodPlgO0w&targetid=kwd-3925458576&skw=turbotax military&adid=171817971774&ven=gg&gclid=CPHr_tW3w9ICFSh3MgodPlgO0w&gclsrc=ds
E1 - E5 get FREE state & federal taxes with Free Edition or Deluxe. All other personnel ranks will receive a military discount on all TurboTax federal products.
 

Blueman

Member
If he is your friend, maybe you should reconsider... but I digress.
I totally agree with you normally. I said a "friend," but he's more of an academy (classmate parent) acquaintance and he stubbornly let me know his annoyance in my questioning something he was so sure of. He didn't want to hear any of my explanations or what I've heard and read so far. At this point, his damage is already done. Even if he suspects he may be wrong, he probably wants to ignore it. I'd prefer to keep the relationship cordial than making him aggressive again and making our kids feel awkward. I understand your point though.
 

Blueman

Member
Ok, so we filed DS's tax tonight using turbo tax. Things were smooth until they asked if he was on PCS. Since he's at the academy for all four years, we said yes, which gave him a part- year resident status. And somehow, he ended up owing $0 for state tax either because of his low income (about $12,000) or his part-resident status as active military. Does this sound right? We're not complaining, but either our CPA had no experience with military tax or we did it wrong. We owed last year according to our CPA's calculations. Do most cadets end up with no or little state tax usually?
 

ktnatalk

Sailor. Shipmate. Parent.
Ok, so we filed DS's tax tonight using turbo tax. Things were smooth until they asked if he was on PCS. Since he's at the academy for all four years, we said yes, which gave him a part- year resident status. And somehow, he ended up owing $0 for state tax either because of his low income (about $12,000) or his part-resident status as active military. Does this sound right? We're not complaining, but either our CPA had no experience with military tax or we did it wrong. We owed last year according to our CPA's calculations. Do most cadets end up with no or little state tax usually?
Rules and laws are different from state to state. The one DD and I claim doesn't have state tax. Of all the states that have state income tax, some will still require paying while station out of state. Some will exempt you, and some require paperwork to do so:

https://www.serviceacademyforums.com/index.php?threads/for-connecticut-residents.53334/

A visit to the state comptroller's website will probably give you the answer you are looking for. Looks like your CPA can learn a few new things as well.

Since we are on this subject, when a military member PCS to a state that have no state income tax (e.g. Florida, Texas and Washington), she/he can file a form with the personnel/finance office to change her/his residency to that state for state income tax purposes.

Also, this may help you and your CPA:
https://www.thebalance.com/servicemembers-civil-relief-act-simplified-3332928

*Disclamer: I am not qualified to provide any tax advice. Reading my creative writing does not constitute receiving legal advice from me either!
 

ktnatalk

Sailor. Shipmate. Parent.
I totally agree with you normally. I said a "friend," but he's more of an academy (classmate parent) acquaintance and he stubbornly let me know his annoyance in my questioning something he was so sure of. He didn't want to hear any of my explanations or what I've heard and read so far. At this point, his damage is already done. Even if he suspects he may be wrong, he probably wants to ignore it. I'd prefer to keep the relationship cordial than making him aggressive again and making our kids feel awkward. I understand your point though.
Sure you can inadvertently point him to this thread in SAF, or maybe he already read it last night and is working on his amendment?
 

brovol

Member
Haven't looked at the program yet but wouldn't the pay for E-5 or O-1 be far more than cadets' ? Does it matter at the end? As I stated, I've used our CPA until now and that information was never asked. Is it just a Turbo Tax thing?

Slightly off subject, I've got a friend who's two kids go to SA's, but he's claiming them both dependents all four years. How can that be? He says his CPA said it was fine. Is there a legitimate way to do that, or are they doing something wrong?
Recently we debated this on another thread, and I argued that the cadets can be claimed, particularly the first year. Many argued just the opposite, but I believe they were relying on what others had said over the years, as opposed to the language of the current rule. It's a close call I think, so I asked a local CPA who used to do my business returns. He concluded that as long as the cadet does not claim himself/herself, that the parent can claim. I did not hire the CPA to do my taxes. I simply called and gave him the facts, then asked his assessment. So that is the disclaimer.

It comes down to two things. Residency and contribute. Did child live with you for more than half the year? Full time student living away from home still counts as living at home. Did the CHILD contribute more than 50% of his own support? If no, you can claim; or at least that is what the CPA said, and what my conclusion was. The majority on this board will likely disagree however.

Read the rule and make your own conclusions. As I say it is an interesting issue.
 
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