Being a military spouse comes with plenty of challenges, but when it comes to taxes? You actually have more perks than most people realize. That’s right: military spouses get tax breaks that civilians don’t. And if you’re not taking advantage of them, you’re leaving money on the table.
The Military Spouse Residency Relief Act (MSRRA) is your new BFF
PCS orders move you all over the country. But that doesn’t mean you have to change your state of residence every time. Thanks to the Military Spouse Residency Relief Act (MSRRA), you can keep your home state for tax purposes, even if you don’t live there anymore.
What does that mean in real life? Say you’re stationed somewhere with high state income tax (looking at you, California). But your home state has no income tax (hi, Texas, Florida, and Tennessee!), you might not have to pay state taxes at all.
This also applies to property taxes. If you’re still registered in your home state, you could be eligible for tax breaks on a home you don’t even live in full-time. You get to choose the tax situation that works best for you, instead of being stuck with whatever your duty station hands you.
You might not have to pay state taxes at all
Military spouses who earn income in their new state don’t always have to pay state taxes there. If your home state is tax-free (or just has better rates), you can legally stick with it instead of getting hit with higher taxes just because the military moved you.
This is huge if you’re working remote, freelancing, or running a small business. It’s also one of the biggest tax breaks that military spouses forget to use.
You can file for free
Tax prep is expensive, unless you’re a military spouse, in which case you might not have to pay a dime.
Military OneSource offers free tax services through MilTax, which means you can file your federal and state returns without spending anything. Even better? If you get stuck, you have access to tax professionals who actually understand military pay, PCS deductions, and all the weird stuff civilians never have to deal with.
If you’d rather talk to someone in person, most bases have free tax prep centers where IRS-trained volunteers will walk you through everything. You don’t have to fight with TurboTax on your own. There’s literally a team of people who will do it for you.
Don’t forget your PCS deductions
Moving is expensive, and while the military covers a lot, it rarely covers everything. Some of those out-of-pocket expenses can be deducted from your federal taxes, if you know what to claim. If you moved for orders and had to pay for things like temporary lodging, gas, storage, or even shipping household goods, there’s a good chance those expenses qualify.
To take advantage of the deduction, you need proof of what you paid. Receipts for lodging and transportation are obvious, but mileage counts, too. The same goes for tolls, parking fees, and even certain moving supplies. If you’re unsure about whether an expense counts, keep the receipt anyway. Worst case? It doesn’t qualify. Best case? You get a tax break.
One thing to know: PCS deductions only apply to federal taxes, so depending on your state, you might still have to navigate local tax laws. But for most military families, this deduction alone can offset some of those annoying moving costs that never seem to make it onto the official reimbursement list.
What to do if you’re self-employed
If you’re running a business as a military spouse, you have access to tax breaks that can make a real difference. Unlike traditional W-2 employees, freelancers, small business owners, and independent contractors can claim deductions for things like home office space, internet costs, business travel, and supplies. But for military spouses, there’s an extra layer of opportunity, especially when PCS moves impact how you run your business.
If relocating meant buying new equipment, updating licensing, or re-establishing your business in a new state, those costs could be deductible. Certain states even offer military spouses business incentives, like reduced fees for business registration or home-based business exemptions. And if you had to pause work or lost income due to a PCS, it might be worth looking into self-employment tax adjustments or claiming specific credits designed for small business owners dealing with relocation.
The key is tracking everything related to keeping your business running through a PCS. Even things like marketing expenses, professional memberships, and a portion of your phone bill could count. If you’re working from home, a percentage of your rent or mortgage may be deductible, too. And if you travel for work, your flights, lodging, and meals could also qualify.
When it’s time to file
As a military spouse, you have way more tax breaks available than you probably think. The trick is knowing where to find them and making sure you claim every single one.