Free tax service for cadets

Our son had his taxes done for free all four years at USAFA by the staff there. Perhaps this service isn't provided anymore with the free online services. In all 4 years he got almost all, if not all, of his state and federal taxes back as a refund since his income was small.

I will second the suggestion about declaring residency in a state that you PCS to if it has no state income tax. Son did that when he was in Del Rio for pilot training and has kept his Texas residency since then and has never paid any state income tax.

Stealth_81
 
Stealth_81 said:
Our son had his taxes done for free all four years at USAFA by the staff there. Perhaps this service isn't provided anymore with the free online services. In all 4 years he got almost all, if not all, of his state and federal taxes back as a refund since his income was small.

I will second the suggestion about declaring residency in a state that you PCS to if it has no state income tax. Son did that when he was in Del Rio for pilot training and has kept his Texas residency since then and has never paid any state income tax.

Stealth_81
Click to expand...
Do you have to have a domicile in said state? If not, how do you handle address of record (and mail that may arrive there).
 
brovol said:
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.
Click to expand...

Make sure you have read the Tax Information 2016 on the Parents' Information page. http://www.usma.edu/Parents/SitePages/Home.aspx

3. DEPENDENT EXEMPTION/PERSONAL EXEMPTION: Each year, a number of
Cadets in our plebe class find their tax return is rejected by the IRS because both they
and their parents or guardians have claimed the same personal exemption. Many
parents or guardians believe they can continue to claim their son or daughter while they
are a full-time student. However, being a full-time student is only one of the five tests
that must be met in order for your child to be a “qualifying child” for tax purposes. Most
importantly, in order to claim a dependent the taxpayer must be able to show that
he/she provided more than half of the dependent’s support for the tax year. After
totaling cadet pay, food, education, room and board, the Army and your Cadet show a
combined contribution of more than $40,000 in support. The exact amount of the
combined Army and Cadet contribution will be circulated shortly. In most
circumstances, your financial support does not exceed this amount. Should you have
any further questions regarding this matter, you may wish to consult independent legal
counsel, IRS Publication 17, and/or the Internal Revenue Service.

Also, cadets can have their taxes prepared for free at the West Point Cadet Tax Center. Specifics are on the Parents' Information page as well.
 
kinnem said:
Do you have to have a domicile in said state? If not, how do you handle address of record (and mail that may arrive there).
Click to expand...

No, you do not if you are AD military. Once you establish residency by getting a Texas driver's license and living there 12 months you can keep the residency even if you do not keep a home there.

Stealth_81
 
Dixieland said:
Make sure you have read the Tax Information 2016 on the Parents' Information page. http://www.usma.edu/Parents/SitePages/Home.aspx

3. DEPENDENT EXEMPTION/PERSONAL EXEMPTION: Each year, a number of
Cadets in our plebe class find their tax return is rejected by the IRS because both they
and their parents or guardians have claimed the same personal exemption. Many
parents or guardians believe they can continue to claim their son or daughter while they
are a full-time student. However, being a full-time student is only one of the five tests
that must be met in order for your child to be a “qualifying child” for tax purposes. Most
importantly, in order to claim a dependent the taxpayer must be able to show that
he/she provided more than half of the dependent’s support for the tax year. After
totaling cadet pay, food, education, room and board, the Army and your Cadet show a
combined contribution of more than $40,000 in support. The exact amount of the
combined Army and Cadet contribution will be circulated shortly. In most
circumstances, your financial support does not exceed this amount. Should you have
any further questions regarding this matter, you may wish to consult independent legal
counsel, IRS Publication 17, and/or the Internal Revenue Service.

Also, cadets can have their taxes prepared for free at the West Point Cadet Tax Center. Specifics are on the Parents' Information page as well.
Click to expand...
The only problem with that information provided on the parents page is that it is not what the tax code says, but is rather what it used to say before it changed. The code says that the CHILD must not have paid for more than half of his/her own support, and the amount of support paid by the parent is not dispositive.

Again; everyone needs to read and get whatever advise is necessary before making a decision on that question. I was only pointing out that it is a debated issue which has been discussed on other threads. To each his own.
 
Stealth_81 said:
No, you do not if you are AD military. Once you establish residency by getting a Texas driver's license and living there 12 months you can keep the residency even if you do not keep a home there.

Stealth_81
Click to expand...
Then how do you validate your residency as a cadet? Just the PCS? Doubt DS will get a car at school, so no drivers license. This is all good information. Thank you!
 
Before jumping into trying to change your residency, especially as a cadet, check your state tax codes for military exemptions/deductions.

For example, Missouri, even though they withhold taxes, considers active duty military pay "exempt" from state taxes even if you are stationed out of state. You essentially deduct all active military pay from your income when filing. So, you get 100% of the withheld taxes back when you file.

Also, if you change residency during the year, you will be filing state tax forms for two states -- each state wants their "fair share" -- called part-year resident.
 
ktnatalk said:
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!
Click to expand...
Lots of eye-opening stuff. Thank you! One thing for sure. I'm definitely starting to feel nderstand that not all CPA will know all the military stuff, and DS better learn to file correctly from now on ow find a CPA with lots of military tax experience.
 
Capri120 said:
Before jumping into trying to change your residency, especially as a cadet, check your state tax codes for military exemptions/deductions.

For example, Missouri, even though they withhold taxes, considers active duty military pay "exempt" from state taxes even if you are stationed out of state. You essentially deduct all active military pay from your income when filing. So, you get 100% of the withheld taxes back when you file.

Also, if you change residency during the year, you will be filing state tax forms for two states -- each state wants their "fair share" -- called part-year resident.
Click to expand...
Ugh. Good point. Will consider all carefully!
 
The other thing that is confusing people is that the cost of using which service for Turbo Tax. If you file a 1040EZ, then there shouldn't be a charge to file your taxes. That applies to everyone, not just members of the military. I used it the last three years to cover my kids summer jobs. This should cover 99.9% of the first year cadets for sure.

Since R-Day is July 3rd, first year cadets will live with there parts for more than half the year and can be treated as a dependent. After the first year, you are no longer able to claim them.
 
Last edited:
Blueman said:
Then how do you validate your residency as a cadet? Just the PCS? Doubt DS will get a car at school, so no drivers license. This is all good information. Thank you!
Click to expand...

A cadet would probably not change tax residency unless their home state has a higher net state tax rate than Colorado, and with their pay being so low while they are there it probably wouldn't be worth it. You also cannot change your residency to Colorado if your main purpose to be in the state is higher education and you are under 23 years of age. Son kept his Wisconsin residency until he went to pilot training after graduation. Each state will have different requirements for residency. Tell them to shoot for Texas or Florida as a first duty station. ;)

Stealth_81
 
USMA 1994 said:
Since R-Day is July 3rd, first year cadets will live with there parts for more than half the year and can be treated as a dependent. After the first year, you are no longer able to claim them.
Click to expand...

USAFA I-Day is June 29. So, not 6 months.
 
Capri120 said:
USAFA I-Day is June 29. So, not 6 months.
Click to expand...
Will the Cadet be home for Christmas? Won't those nights put you over? Actually, full time students living away from home while at school still count as living at home for residency purposes.
 
brovol said:
Will the Cadet be home for Christmas? Won't those nights put you over? Actually, full time students living away from home while at school still count as living at home for residency purposes.
Click to expand...

Students living away from home while at school may still count for whatever but cadets are not college students. They are active duty military so whether they come home at Christmas or not is immaterial. You can't count them for tax purposes.
 
Blueman said:
Lots of eye-opening stuff. Thank you! One thing for sure. I'm definitely starting to feel nderstand that not all CPA will know all the military stuff, and DS better learn to file correctly from now on ow find a CPA with lots of military tax experience.
Click to expand...
Your DS should be able to learn about his taxes and handle it himself, unless he has investment income, etc that makes his super complicated. Those Turbotax and H&R Block websites/softwares make it quite easy to follow. I started filling mine the year I received my first paycheck and now I use tax software to check if I am missing any deduction. He can do it!
 
I've used H&R Block through military onesource for the past couple of years and like it. It's essentially the same as TurboTax premium but free of your E6+.
 
You must log in or register to reply here.
Back
Top