Listed below are some of the ways a military deployment can affect your taxable income:
- If you are deployed to a combat zone, your combat pay is generally excluded from taxable income. This includes basic pay, reenlistment bonuses, and other special pays received while in the combat zone
- You may qualify for an automatic extension of time to file your tax return and pay any taxes due if you are deployed in a combat zone or a qualified hazardous duty area
- Contributions to the TSP made from tax-exempt combat pay are also tax-free when withdrawn.
- Possible other deductions and credits related to travel, housing, moving, etc.
For more detailed information, you can refer to the IRS Armed Forces' Tax Guide (page 13) and the Military Wallet guide on tax benefits of deployment
