It’s the end of January, and that means two things. Well actually it can mean an infinite number of things to several people, but for the purpose of this blog, it means two things. The first thing it means is that the Super Bowl is coming up, and two, it means that tax season is starting. If you are like me, you are looking forward to getting a tax refund. Also, if you are like me, taxes as a whole make less sense than Mark Wahlberg being offered movie roles. What can I deduct? What is the right form, and I can I say that string cheese is a business expense? In fact, I am so repulsed by tax law that I’d rather take a joyride with Justin Bieber than learn about taxes. Also, I really can’t stand those tax commercials with the nice fella jumping up and down as if going to Jackson Hewitt was life changing. It’s not like he met Jennifer Lawrence. (That’s the only reason I can think to act like that in public.) If you are a Veteran who started receiving VA Disability compensation last year though, you may be wondering about paying taxes on your compensation. Well, good news, you may be dancing around like that guy after all.
It’s actually quite simple, VA Disability is tax free! Are you dancing yet? In other words, you don’t have to pay taxes on your back pay or your monthly compensation checks from the Department of Veterans Affairs.
According to the IRS, Do not include disability benefits you receive from the U.S. Department of Veterans Affairs (VA) in your gross income. In particular some of the payments which are considered disability benefits include:
•Disability compensation and pension payments for disabilities paid either to veterans or their families,
•Grants for homes designed for wheelchair living,
•Grants for mot
or vehicles for veterans who lost their sight or the use of their limbs, or
•Benefits under a dependent-care assistance program.
In other words, Disability Compensation, Pension, Aid and Attendance, and several other VA programs are not taxed, and do not need to be included in your income.
But wait, it’s not that simple. Many Veterans who receive VA Disability compensation also receive Military Retirement. Guess what…that is taxed. So, it is possible that you will have to pay taxes on your retirement, but not on your VA Disability compensation.
This is where things get a little complicated, and really uninteresting…so I will depart. Please consult an educated tax professional for information relating to your taxes if you receive military retirement. However, I like to think I know a few things about VA Disability compensation. If you would like to know about that, give me a call today. 1-877-526-3457. Or, fill out this form, and I will give you a call.