The IRS provides free tax help to military members and their families through its Volunteer Income Tax Assistance program. VITA offers free tax preparation and e-filing at sites both on and off base. It also has sites to help our military overseas. Here are five things to know about free tax help for the military:

1. Armed Forces Tax Council.  The Armed Forces Tax Council oversees the military tax programs offered worldwide. AFTC partners with the IRS to conduct outreach to military personnel and their families. This includes the Army, Air Force, Navy, Marine Corps and Coast Guard.
2. Volunteer tax sites.  IRS-trained volunteers staff the military VITA sites. They receive training on military tax issues, such as combat zone tax benefits, extensions of time to file and pay and special rules for the Earned Income Tax Credit.
3. What to bring.  To get free tax help, bring the following records to your military VITA site:
   • Valid photo identification.
   • Social Security cards for you, your spouse and dependents. If you don’t have a card you should get a letter from the Social Security Administration to verify your information.
   • Birth dates for you, your spouse and dependents.
   • Your wage and earning forms, such as Forms W-2, W-2G, and 1099-R.
   • Interest and dividend statements (Forms 1099).
   • A copy of your last year’s federal and state tax returns, if available.
   • Routing and account numbers for direct deposit of your tax refund.
   • Total amount you paid for day care and the day care provider’s identifying number. This is usually an Employer Identification Number or Social Security number.
   • Other relevant information about your income and expenses.
4. Joint returns.  If you are married and file a joint return, generally both you and your spouse need to sign the return. If you both can’t be present to sign, you should bring a valid power of attorney form. Use Form 2848, Power of Attorney and Declaration of Representative.

   There is a special exception to this rule if your spouse is in a combat zone. The exception allows a spouse to file a joint return with a signed statement explaining that the other spouse is in a combat zone and unable to sign.

5. IRS Free File.  Do your own taxes with IRS Free File. You can use free, brand-name software or online fillable forms. If your income was $58,000 or less, you qualify for Free File software. If you made more than $58,000, you can use Free File Fillable Forms. Learn more at IRS.gov/freefile.

See IRS Publication 3, Armed Forces’ Tax Guide, for more on this topic. You can get the booklet on IRS.gov or order it by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources:

• Tax Information for Members of the Military
• Special EITC Rules for the Military
• Combat Zone Service Q&As

If a lender cancels or forgives money you owe, you usually have to pay tax on that amount. But when it comes to your home, an important exception to this rule may apply in 2013. Here are several key facts from the IRS about the special exclusion for cancelled home mortgage debt:

• If the cancelled debt was a mortgage loan on your main home, you may be able to exclude the cancelled amount from your income. To qualify you must have used the loan to buy, build or substantially improve your main home. The loan must also be secured by your main home.
• If your lender cancelled part of your mortgage through a loan modification, or ‘workout,’ you may be able to exclude that amount from your income. You may also be able to exclude debt discharged as part of the Home Affordable Modification Program. Visit IRS.gov for more details about HAMP. The exclusion may also apply to the amount of debt cancelled in a foreclosure.
• The exclusion may apply to amounts cancelled on a refinanced mortgage. This applies only if you used proceeds from the refinancing to buy, build or greatly improve your main home. Proceeds used for other purposes don’t qualify. For example, a loan that you used to pay your credit card debt doesn’t qualify.
• Other types of cancelled debt do not qualify for this special exclusion. This includes debt cancelled on second homes, rental and business property, credit card debt or car loans.
• If your lender reduced or cancelled at least $600 of your mortgage debt, you should receive Form 1099-C, Cancellation of Debt, in January of the following year. This form shows the amount of cancelled debt and other information. Notify your lender if any information on the form is wrong.
• Report the excluded debt on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness. File the completed form with your federal tax return.
• Use IRS e-file to file your tax return. E-file is the easiest way to file because the software will do the hard work for you. You can use IRS Free File to prepare and e-file your tax return with either free, brand-name software or online fillable forms – all for free. Otherwise, you may file electronically with commercial software, or through a paid preparer.
• Whether you use IRS e-File or mail a paper return, you can use the Interactive Tax Assistant on IRS.gov to find out if you must pay tax on cancelled mortgage debt.

For more on this topic, see Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments. You can get IRS forms and publications online at IRS.gov or by calling 800-TAX-FORM (800-829-3676).