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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15328
Experience:  15years with H & R Block. Divisional leader, Instructor
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I AM A SOLDIER IN IRAQ, IS MY INCOME TAXABLE WHAT IF MY EMPLOYER

Customer Question

I AM A SOLDIER IN IRAQ, IS MY INCOME TAXABLE? WHAT IF MY EMPLOYER MAKES UP THE DIFFERENCE SO THAT I DO NOT LOOSE MONEY IS IT TAXABLE AND IS THEIR LIMITS?
Submitted: 5 years ago.
Category: Tax
Expert:  Robin D. replied 5 years ago.

Robin D :

Hello and thank you for using Just Answer
Earnings received while in these combats zone are excluded from taxable income. They will not show in box one of your military W2.

Robin D :

If you are in Iraq as a civilian then you are still liable to US taxationon income earned while overseas. Even if you are in a combat zone. You can though, use the foreign earned income exclusion provided you are out of the US for 330 days in a 12 month period.

Robin D :

Bonuses and special pay for military personel (enlisted) are also excluded from taxble income if earned in the same month in which you served in a combat zone.

Robin D :

In short if you are a solidier deployed to Iraq and paid by the US Military then your pay while you are deployed is not taxable and will not be on your W2.

Customer :

Robin D:

Customer :

Robin D, what about money my civilian employer paid to make me whole, is that income taxable?

Robin D :

Only your military pay will be effected by your deployment. If your civilian employer grossed up your wages to pay for tax then the amount is taxable supplemental compensation.

Robin D :

If an employer pays the employee's share of payroll taxes without deducting it from the employee's pay, the tax paid on behalf of the employee generates additional income to the employee.

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