Due to the tax season coming and also my Mother questioning me about me doing my taxes once I am active duty, my question is: Do i still file for taxes? Federal and State?  Will taxes be taken out of my check?

Absolutely yes to both. (If your state has a state income tax.) Yes, taxes are taken out.

I was wondering about this too. My husband is stationed in NH, so he pays federal tax, and no state tax there. The address on his W2 will be a NY address though, since that is the address he uses as a permanent residence (since he lives on his ship). NY state taxes were not deducted from his pay, since he doesn't work in that state. Will he still owe NY state taxes when we file?

This comes up every year and every year people get into trouble.

First things first. Just because you live somewhere doesn't mean that is the tax code you follow.

Jannelleyfish I will use you as an example. Just because your husband lives in NY and works in NJ, it doesn't mean he doesn't have to pay state tax to either of those states. There are three different addresses that you need to consider.

1. Home of record: simply where you lived when you entered the military. This is what they will base how much you will get paid to move your stuff when you leave the service. Other than that it doesn't mean much.

2. Current residence. Where you live now. Important because that is where you get your mail.

3. State of residence: Where you officially claim for tax purposes.

All 3 of those items may be the same or they may all be different. What matters for taxes is number 3. On your LES, you will see a block that says "Tax data" It will tell you what state you are expected to pay taxes to.

My guess is that you guys made no changes since joining the CG so whereever you joined the service is who is expecting you to file a tax return. Just look on the LES and you will know for sure.

By the way, you ALWAYS have to claim Federal Taxes. Paying state taxes depends on the above.

sardaddy,
You cleared that info up - I can see how this can confuse people especially for the teenagers and USCG is their first job.

Excellent question! Sardaddy has an excellent answer. I am posting this to the FAQ's.

Thanks Sardaddy!