CZTE The Triple Tax Benefits of Combat Zone Tax Exclusion | Tax Free Pay for Military #177

Jun 2, 2025

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Did you know there’s a way to get tax-free income, tax-free growth, AND tax-free withdrawals—all legally?

If you’re in the military, you have access to one of the most powerful wealth-building tools that civilians can only dream of. Combat Zone Tax Exclusion (CZTE) is the golden ticket, and in this episode, we break down exactly how you can leverage it to maximize your savings and accelerate your journey to financial freedom.

Episode Summary:

Military members deployed to a Combat Zone Tax Exclusion (CZTE) location receive tax-free pay, but did you know this can also supercharge your retirement savings?

No federal income tax on military pay earned in a combat zone.
Contributions to Roth IRA or Roth TSP using tax-exempt combat pay grow tax-free.
Withdrawals in retirement are completely tax-free, giving you a massive financial advantage.

We also discuss the Savings Deposit Program (SDP), tips for avoiding common financial mistakes, and strategies to maximize your tax-free earnings while deployed.

Key Takeaways:

Maximize Your Benefits: Understand the triple tax benefits and how to supercharge your Roth TSP and Roth IRA.
Combat Zone Pay Benefits: Know which locations qualify and how even touching a combat zone for one day can get you CZTE benefits.
Emergency Fund First: Use the extra tax-free income to build financial security before investing.
Savings Deposit Program (SDP): Earn a guaranteed 10% return with this little-known military savings program.
Tax Planning Strategies: Advanced moves like Roth conversions, tax-gain harvesting, and earned income tax credit eligibility.
Watch Out for Common Mistakes: Avoid lifestyle inflation and missed opportunities to grow tax-free wealth.

Links mentioned today:

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If you have a question you would like us to answer on the podcast, please reach out on instagram.com/militarymoneymanual or email podcast@militarymoneymanual.com.

If you want to maximize your military paycheck, check out Spencer's 5 star rated book The Military Money Manual: A Practical Guide to Financial Freedom on Amazon or at shop.militarymoneymanual.com.

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