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Maximize Your Tax Savings: 10 Essential Urgent Actions to Take for U.S. Military Middle-Class Families Before December 31, 2024

  • December 3, 2024
  • Coach JP Money
Leverage Military Benefits and Smart Strategies to Keep More of Your Hard-Earned Money

For U.S. military families, tax season offers unique opportunities to save, thanks to the special benefits and exemptions provided for active-duty members. With the year’s end fast approaching, now is the perfect time to take action to reduce your tax liability and maximize your financial resources.

Here are 10 smart moves tailored specifically for military middle-class families to make before December 31, 2024.


1. Maximize Contributions to Thrift Savings Plan (TSP)

The TSP offers a retirement savings option exclusively for military members and federal employees. Contributions to the traditional TSP lower your taxable income, while Roth TSP contributions grow tax-free.

MAX OUT! For 2024, the maximum amount an active-duty U.S. military member can contribute to their Thrift Savings Plan (TSP) is $23,000. Additionally, if you are 50 years old or older, you can contribute an extra $7,500 as a “catch-up” contribution, bringing your total possible contribution to $30,500 for the year.

TSP:  GET MORE DETAILED INFO NOW, CLICK >>>

These contributions are an excellent way to save for retirement while taking advantage of tax benefits, so maximizing them before the end of the year can be a smart financial move.

Deploying? Take advantage of the Savings Deposit Program (SDP) for high-interest savings during deployment.


2. Use Tax-Free Combat Pay to Boost Retirement Savings

If you’ve earned combat zone pay, it’s tax-free, but you can still contribute to your Roth IRA or TSP Roth account, letting that tax-free income grow further without future taxation.


3. Claim the Military Spouse Residency Relief Act (MSRRA)

The MSRRA allows military spouses to maintain their home state residency for tax purposes, regardless of where they are stationed. This can mean significant savings, especially in states with no income tax.


4. Max Out Health Savings Accounts (HSAs)

Active-duty military families with a high-deductible health plan may qualify for an HSA. Contributions are tax-deductible, and funds used for medical expenses are tax-free. Check with TRICARE to determine if you qualify for an HSA-compatible plan.


5. Use Flexible Spending Accounts (FSAs) for Eligible Expenses

Military families with access to FSAs can save pre-tax dollars for healthcare and dependent care expenses. Use any remaining funds by the deadline—typically December 31 or March 15—to avoid forfeiting them.  See MiliarySourceOne for details >>>


6. Leverage Education Benefits and Tax Credits

Military families often access tuition assistance or the Post-9/11 GI Bill, but don’t overlook tax credits like the American Opportunity Tax Credit (AOTC) or Lifetime Learning Credit for out-of-pocket tuition costs. Paying education expenses for dependents? Make those payments before year-end to claim the credit.


7. Make the Most of Tax-Free Housing Allowances

The Basic Allowance for Housing (BAH) is tax-free and doesn’t count toward your taxable income. Use this benefit to allocate more income toward tax-deferred or tax-free savings accounts, such as a Roth IRA or TSP.


8. Harvest Investment Tax Losses

If you have taxable investment accounts, sell underperforming assets to offset gains or reduce taxable income. Just remember the wash-sale rule—wait at least 30 days before repurchasing the same asset.


9. Donate to Charities Supporting Veterans and Service Members

Many military families feel strongly about giving back to their communities. Donations to qualified charities, including those supporting veterans, can be tax-deductible. Keep records of your donations, whether in cash or goods, to maximize deductions.


10. Claim the Energy Efficient Home Improvement Credit

Own a home? Military families stationed in the U.S. may qualify for credits on energy-efficient upgrades like new insulation, solar panels, or energy-efficient appliances. These improvements can save money and reduce your tax bill.  For more info, see IRS >>>


Bonus Tip: Take Advantage of Free Military Tax Services

The Department of Defense offers MilTax, a free tax preparation and filing service specifically for military families. MilTax can help you identify benefits like the Earned Income Tax Credit (EITC) or exclusions for combat pay, ensuring you don’t miss out on valuable savings.


A Tax Strategy Built for Military Families

Military service comes with unique financial benefits, and these strategies can help middle-class military families keep more of their hard-earned money. By acting now, you’ll be ready for tax season and better positioned for financial success in 2025.

What’s your first move? Start today with these military-specific tips to lock in your savings before December 31!

IMPORTANT:  If you want personal coaching on this or any money stuff, just schedule a FREE call with me, Coach JP Money and I will be happy to help.

Coach JP Money

Charles Bivona Jr., aka Coach JP Money, is a business strategist, financial coach, and founder of CoachJPmoney.com. A lifelong entrepreneur, he launched his first real estate deal at 17 and went debt-free by 1998. Since then, he has built national media brands, advised small businesses, and helped clients grow online using smart strategy, digital tools, and creative grit.

An expat living in Baja, Mexico, Charles also writes and produces music as Johnny Punish and lives off-grid at Hacienda Eco-Domes, a sustainable retreat he built with his wife. Through providing small business services, coaching, writing, and podcasting, he’s on a mission to help others win their future—on their terms.

Read his full bio at PunishStudios.com >>>

www.coachjpmoney.com
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