Jan Bender was ready to head home. After nearly 15 years in California, he and his wife were ready to take their four kids to more affordable pastures. So, when he landed a remote gig in the tech sector, they settled near Indianapolis, a reasonable drive from the family farm on which he was raised.
“When we made the decision as a family to relocate elsewhere, my connection with the Guard was a big consideration,” said Bender, a lieutenant colonel who joined the California Army National Guard after an active duty stretch with the Marines.
With retirement not long over the horizon, Bender chose to remain in the Cal Guard rather than transfer to an unfamiliar unit in the Hoosier State. That has meant travel between Indiana and California several times each year for prolonged drill weekends and Annual Training.
“I wasn’t willing to divest those personal and professional relationships just to start over in the final chapters of my career,” Bender said. “I knew if I remained in the Cal Guard, I could have a more meaningful impact on the lives of soldiers I’ve spent my life with.”
It also means he’s had to master the tax write-off, as he’s required to foot the bill for much of his travel. And he’s hardly alone. Many reserve component members travel great distances to train with units to remain in their career fields or to secure promotions. There is a silver lining, though: the travel expenses Uncle Sam won’t reimburse are usually fair game for deductions come tax season.
The IRS website is clear in its guidance: “If you are a member of a reserve component of the Armed Forces and you travel more than 100 miles away from home in connection with your performance of services … you can deduct your unreimbursed travel expenses on your tax return.”
While the personnel and fiscal sections of one’s unit can help define what is reimbursable, it’s on the service member to ensure nothing falls through the cracks. And that process is a year-round effort, rather than scrambling through receipts in April when one decides to fire up TurboTax a week out from Tax Day.
“The most important thing is having a spreadsheet or some kind of software to track all your expenses,” said Gabrielle Graham, a Navy veteran and tax professional. Her business Elle & Company Accounting regularly prepares returns for active duty and reserve component members. “That can be expenses for the mileage driven, maybe you have to stay overnight and you’re paying for your own hotels, even small things like parking fees, tolls, ferry rides, even upkeep on their uniforms.”
Graham warns against getting “too creative” – a gym membership, for example, while helpful in staying fit to fight, is a bit of a stretch. But any travel or drill-related expense that isn’t reimbursed is worth tracking and claiming, so long as the distance exceeds 100 miles.
“And be sure to research whatever state you are in and read about the differences in what your state might offer,” said Graham, who offers virtual tax services nationwide. “Some states, like California, for example, allows them to deduct uniforms at the state level, but maybe not in another state.”
Given the nuances in tax laws from state to state and the ever-changing federal tax codes and regulations, Graham said it’s worth considering professional help, especially if one notes significant fluctuations in the numbers on their Form 1040 from year to year.
“Anyone can go to the IRS and sign up and legally they can prepare taxes,” Graham cautions. “I say at the forefront, check their credentials. Do they have a degree, do they have experience, have they worked at a firm? And, beyond that, I think I’m just big on the energy being right, someone with whom you can communicate and work well is key.”
Tax tips from Gabrielle Graham:
- Reserve and National Guard members will report duty-related expenses on the Form 2106.They then will be transferred to another form called the Schedule 1.
- Travel must have been at least 100 miles away from their home to claim deductions.
- Tax documents should be kept for a minimum of 3 years.
- If a reservist or guardsman realizes they did not include these travel expenses in prior years, they are allowed to amend the tax returns and get those potential savings back. A tax professional can help to that end.