Like many other Americans, members of the military face a variety of financial challenges during their lifetimes. Fortunately, their service is rewarded with special benefits, tax breaks and other legal protections that can alleviate financial concerns. Here are some of the financial benefits available to service members and their families throughout their lives.

Basic Pay and Allowances

A soldier’s total pay consists of several different parts as opposed to single blanket salaries commonly offered in civilian positions. Although officers will make more than enlisted servicemen, both of their compensation packages can consist of any of the following benefits:

  • All soldiers receive a basic salary. The exact dollar amount will vary depending on whether you enlisted or entered as an officer. Your basic salary might seem low, but is supported by other allowances and increases when you are promoted.
  • Basic Allowance for Housing (BAH) is offered to service members who do not live in military housing and is affected by your number of dependents.
  • Basic Allowance for Subsistence (BAS) covers food costs and is offered to service members who are not already on a government meal plan.
  • Special pay is given to those performing special duties or hazardous tasks. Pilots and aircrew might receive flight pay, while active service members in war zones can receive Hostile Fire or Imminent Danger Pay.

Insurance and Tax Breaks

A majority of a soldier’s pay is tax-free, meaning you’ll have less to pay during tax season and be able to keep almost all of what you make. In addition, federal law allows service members to maintain legal residence in one state even if they’re stationed in another. If your legal residence has no income tax, you can still use those benefits while being stationed somewhere else.

Service members also qualify for one of the lowest-cost life insurance programs. The Servicemembers’ Group Life Insurance costs 7 cents per $1,000 of coverage per month, totaling $336 a year for the maximum coverage of $400,000. Unlike other insurance companies, these programs are unaffected by your age, health or likelihood of being deployed.

Post-9/11 GI Bill

If you plan to attend college during or after serving, the Post-9/11 GI Bill offers a variety of educational benefits to service members who have been on active duty for at least 90 days since September 10, 2001. Some offerings include:

  • Tuition and fees coverage: The Department of Veteran Affairs (VA) can pay up to 100 percent of your tuition and fees directly to the school of your choice, if you qualify. If you are attending a private or foreign school, the VA will pay you an annual maximum of $21,970.46.
  • Monthly housing allowance: Your housing allowance is based on the ZIP code of where you are attending school and how many credit hours you are enrolled for. The stipend currently averages $1,611 a month, but can exceed $2,700.
  • Book and supply stipend: Students can receive up to $1,000 at the beginning of each year for books and other supplies. The amount is paid proportionately based on the number of credits taken, with $41 given per credit hour.

Eligible service members can even transfer these benefits onto their spouse and/or children if they meet the requirements.                                                                                                                            

Tax Experts in Melbourne

GI Tax is a full-service tax company dedicated to helping all Americans, including veterans and government employees, any time personalized financial services are needed. Our mission is to deliver the highest quality of service and accuracy when preparing your tax return. Contact us today for more information or to speak with one of our knowledgeable staff.