How Much Money Can An Active Duty Officer Save

Why did you join the war machine? Chances are the answer to that is quite complex. It likely includes a mensurate of having a desire to serve our state combined with the potential fiscal benefits of a military career. Succeeding in the war machine can be a very financially rewarding career path, and also brings the satisfaction of knowing that you have washed your part to serve your state. As a military service member, there are numerous benefits beyond your paycheck that you can also savor.

Sadly, many agile duty service members and veterans neglect to take total reward of these benefits, and they are, in outcome, losing out on important financial perks to their careers. In a 2014 survey, the Washington Post institute that over half of the veterans surveyed had non used the benefits outlined in the Post-9/11 GI Bill, and that is just one of the many benefits out there for service members and vets.

The financial benefits of being in the military include many different categories. Yous tin can receive benefits in your taxes, to pay for your education, to cover housing expense and to assistance y'all save more effectively. Are you lot using these to the fullest extent? This guide volition assist yous see all of these potential financial benefits at a glance, and dig a petty deeper into how yous can use them to make the most out of your military career.

Spring to:

• Tax benefits
• Savings accounts and insurance
• Dwelling house loans and living expenses
• Education and career

Tax Benefits for Members of the Military

As a veteran or service fellow member, you accept given much of your life to serve our country. You've also sacrificed financially during your time in service. As a "thank you," the regime offers many financial benefits to service members and their families. Some of these are tax-related.

For instance, as a member of the military machine, some of your pay may not actually be taxable. You lot likewise have items you can deduct that civilians cannot. Military machine service members and veterans even have investment revenue enhancement breaks they can take reward of to relieve even more.

To have reward of all of these tax benefits, you will desire to work with an accountant or a tax training program that is knowledgeable nearly these benefits. Still, having a skilful working knowledge of what is available to you will help ensure even farther that you get what you are due.

Y'all accept earned these tax benefits. It'south of import that you take full advantage of them. Hither are some valuable tips y'all tin can apply to ensure you are not missing any important taxation benefits that you have earned.

• Know what pay and benefits are taxable, and which ones are non. Being in the military does not exempt y'all from income tax, but some of your pay and benefits tin't be considered "income." Your basic pay, active duty pay, bonus pay and incentive pay are all taxable income. However, pay for accrued leave, educatee loan repayments, reenlistment bonuses and combat pay do not count as income. Allowances, like living allowances and uniform allowances, life insurance payments, and expiry benefits are not taxable.
• Use tax-free pay to contribute to savings plans more than wisely. If you contribute to an Private Retirement Account (IRA), you can allow that money to grow tax-deferred. Over the years, you lot can earn even more than tax-gratis money. In addition, you tin use a Roth IRA to grow taxation-free income into tax-free withdrawals that you utilize during retirement. Both yous and your spouse can contribute up to $6,000 annually to your IRA. If you're age 50 or older, the annual limit is $vii,000.
• Use non-taxable income wisely. While combat pay and other types of pay or reimbursement may not be taxable, you may wish to include them when calculating your Earned Income Revenue enhancement Credit. This is especially true if your combat pay was your but income. If you don't report it, you may not qualify for the tax credit because you lot will appear to have had no income.
• File remotely. Yous don't have to be in the same physical location equally your spouse to file your taxes. You tin can have your spouse utilise a power of chaser to file a articulation return on your behalf if you are stationed away from abode when information technology's time to file taxes.
• Avoid capital gains taxes on a dwelling. If yous alive in your own dwelling house rather than in armed services housing, you can avoid capital gains taxes if you chose to sell the property. Most of the time homeowners can sidestep these taxes if they lived in the home for at least 2 out of the five years prior to selling it. Nevertheless, those in the military tin can append this exam for a period of up to 10 years, provided they were on qualified duty. Qualified duty ways being stationed fifty or more miles from the business firm for 90 or more days.
• Deduct travel and lodging costs. For those who are reservists, travel is part of the procedure. Yous are able to deduct your travel and lodging expenses if you lot travel more than than 100 miles from home and if you stay overnight. You tin can also save half of the cost of any meals during these trips. To do this, salve your receipts then y'all accept proof of what yous spent.
• Consider early 401(k) withdrawals. While this might seem like an investment benefit, it'southward really a revenue enhancement do good. If you are a reservist who was called to agile duty later September 11, 2001, and served for over 179 days, you can brand a withdrawal while on agile duty from your 401(k) without the typical tax penalties.
• Deducting moving expenses is easier. Anyone who moves because of a job can deduct some of their moving expenses, but the tests can be quite cumbersome. This is not then for members of the military who have a permanent modify of station. You lot can deduct whatever un-reimbursed moving expenses without the need to show the tests civilians take to testify to make these deductions. Y'all cannot deduct the moving expenses the armed services pays for.
• Take advantage of tax filing extensions. Information technology's not easy to file your taxes when yous are serving overseas. Those who are in combat zones are automatically given a 180-twenty-four hour period extension for filing their tax returns, paying taxes and filing a claim for a refund. The only taxes y'all must pay by the April 15 filing deadline are your Social Security and Medicare taxes. Dissimilar civilians who take the filing extension, you don't have to practice annihilation to employ for it, and you won't pay interest or penalties on taxes you owe. You can also take this extension if you are continuously hospitalized for injuries received while serving.
• Deduct uniform costs. Sometimes service members must pay for and maintain uniforms that they are non wearing while off duty. They are not given an allowance to cover these costs. If yous are in this situation, y'all tin deduct your maintenance and purchase costs.
• Continue your state of residency the same. Being in the military means a lot of moves. If moving and changing your state of residency has negative effects on your taxes, you and your spouse tin retain your state residency for tax purposes fifty-fifty while stationed elsewhere. This can prevent your electric current state from taxing your income or your spouse'southward income, and if the employer does withhold state taxes, you lot can file a nonresident return to get those refunded to you. However, you will have to then report the income to your state of residency, and pay whatsoever applicable taxes.
• Deduct job search expenses. When you are ready to return to civilian life after your war machine career, you may be able to deduct some of your job search expenses. For instance, if you travel for interviews, pay someone to assistance you fix a resume or pay fees to a job placement agency, those expanse all deductible.
• Take advantage of tax filing help. Check with your base to see if you can get free tax preparation help. You can besides file electronically through Military OneSource MilTax.
• Empathise tax liability forgiveness. If a member of the war machine dies while on duty or while serving in support of a combat operation, and that service member owes revenue enhancement liability, the revenue enhancement liability is forgiven. If tax liability had been paid, that amount is given back to the surviving family member.
• Understand the revenue enhancement of death gratuities. Again, this is an issue that only applies for service members who dice in agile duty, but it is still an important benefit to understand. If you lot are killed while on active duty, your survivors receive $100,000 from the regime. This death do good cannot be taxed.

For more than information about taxes and the war machine, visit:

• IRS.gov: Taxation Breaks for the Military machine
• CNN: In the Military? Don't Miss out on These Tax Benefits
• Armed forces.com: xiii Deductions Y'all Can't Ignore
• IRS.gov: Military Taxation Guide
• Armed services Authority: Overlooked Military machine Tax Deductions

Savings Accounts and Insurance Help

Armed forces life is rarely a walk in the park. You lot and your family unit sacrifice and then that you lot tin can serve our country. For that reason, the authorities offers a number of benefits to service members to help repay them for that sacrifice. In addition to tax benefits, members of the military get a number of other benefits that assist them out financially every bit a thank you for their service. From savings accounts that are unique to the armed services to insurance benefits and reimbursements, if you take advantage of all of these offerings, y'all tin exist set for a good future.

If you lot take full advantage of these programs, you lot can systematically salve for your retirement, make the most out of your investments and ensure you and your family are fully protected against a hereafter potential tragedy.

• Salve for retirement with the Thrift Savings Plan – Saving for retirement when yous're in the military is fabricated easier with the Thrift Savings Programme. This savings programme is one of the lowest costs investment options, charging an almanac expense ratio of just 0.038%, compared to 1 and two% for traditional retirement plans. Cull your index mutual fund, and so invest upwards to $xviii,500 (as of 2018) when not deployed or upwardly to $55,000 if you are deployed. Keep in mind that these limits are subject field to alter based on current regime regulations.
• Earn a guaranteed x% on savings. Through the military'southward Savings Deposit Program, service members can invest up to $x,000 each time they are deployed. That coin is guaranteed to receive 10% annual interest, which compounds each quarter.
• Apply Roth IRAs to your reward. For members of the war machine, a Roth IRA works the same as a civilian. You lot contribute income and then take information technology out tax-costless. However, because you lot have taxation-complimentary income, yous have an added bonus. If you are receiving tax-free income considering yous are in gainsay, cascade some of that money into your Roth IRA. Since Roth IRA savings come out without revenue enhancement, you volition be getting a double benefit. The income itself isn't taxed, and the withdrawals are non taxed either. Contribute up to the $6,000 allowed per year (equally of 2021) to get the well-nigh out of this do good.
• Purchase Servicemembers Group Life Insurance. War machine members have admission to i of the nearly affordable life insurance options out there. First, it does not require whatever health or age screening, and the likelihood of a time to come deployment has no impact. Second, information technology costs simply 7 cents per $one,000 of coverage (up to $400,000 total) for the policy. The program besides allows service members to purchase up to $100,000 for their spouses for very footling money.
• Understand the Traumatic Injury Protection Plan. The Traumatic Injury Protection Plan is office of the Servicemembers' Group Life Insurance program. This automated coverage provides curt-term financial help to anyone who is severely injured, whether in the line of duty or when off duty. This is an automatic offering to anyone who has the Servicemembers' Grouping Life Insurance policy and who suffers a traumatic injury prior to leaving the service.
• Accept advantage of interest charge per unit caps. Nether the Servicemembers Civil Relief Act, you are able to have an interest-charge per unit cap of six% on any loans that you took out before you were sent to active duty. To take reward of this benefit, you have to apply to your lender. This helps costless some wiggle room in your budget if you lot are going to accept less money coming in or more expenses to pay while you are deployed.
• Consider additional armed services specific insurance products. Companies like USAA offer lower cost insurance products for members of the military machine. Employ these for auto insurance, home and property insurance, rental property insurance and more than!
• Understand your medical insurance benefit. Members of the military are insured through Tricare. Larn how these benefits work and use them to their full potential.
• Take advantage of retirement benefits. After xx years of service, you can retire with full retirement benefits. If you cull to retire after xv years of service, y'all can receive either a $30,000 bonus and xl% of your highest pay, or no bonus and fifty% of your highest pay.

For more information about benefits similar these, visit:

• Kiplinger: 10 Best Fiscal Benefits for Military Families
• Air Force's Personnel Center: Military Thrift Savings Program
• Investor.gov: Thrift Savings Plan and Retired Pay
• SaveAndInvest.org: Sympathize Your Thrift Savings Program
• Today's Armed services: Insurance & Retirement Benefits

Home Loans and Living Expenses

When yous are in the military, you lot not just receive savings and taxation benefits, but too housing benefits. Housing options tin be an first-class help to active duty members of the military as they face up the constant reality of potential change of station notifications. Armed forces housing benefits include the ability to live on base of operations housing likewise as a number of benefits for those who choose to purchase or rent a home off base. The benefits besides include allowances and reimbursement for moving expenses. Military machine housing benefits are intended to ensure soldiers, veterans and their families always have a safe and affordable place to live.

Even so, navigating the many unlike options for housing benefits isn't always easy. Also, determining which one is right for you lot is a challenge. Here are some steps you tin take to ensure you are taking reward of all of the potential housing benefits bachelor to you:

• Consider on-base housing. On-base housing is a good choice for many members of the war machine who do non feel they are in a position to purchase home, or who want to avoid the frustrating of trying to sell or rent a dwelling if they demand to movement. When y'all live in on-base of operations housing, many of the amenities of a city will be available to you on the base, and you can experience near like you lot are living in a small military-simply town. These homes do not require rent or mortgage payments. When you live on base, your utilities will probable be covered every bit well, as long as y'all practice not go over 10% of the average free energy usage for your surface area. Home upkeep is also the responsibleness of the base, not you.
• Take a Basic Assart for Housing. If y'all wish to live off base of operations, you can take a Basic Assart for Housing. This coin is to be used to pay rent or mortgage payments for your housing. Sometimes, if you observe a frugal domicile, you lot volition discover that the BAH is more than what your housing expenses are, and this gives you money to add somewhere else in your budget.
• Save on Homeowners and Renters Insurance – With programs like USAA, armed services members tin can save on renter's insurance and homeowner's insurance simply considering of their military condition.
• Use Overseas Housing Assart when it applies to you. This allowance is a reimbursement for housing costs for those who are stationed overseas and who do not take access to government leased or on-base of operations housing options. It volition encompass all or a portion of your housing costs.
• If you qualify for OHA, consider the Motility-In Housing Allowance. Simply for those moves that qualify for OHA, the Move-In Housing Allowance will help cover the move-in costs of your new housing. This may include modifications to the dwelling to arrive safe for war machine members, rental agent fees, not-refundable deposits, installation of utilities or appliances, and like motion-in costs. It does not cover move-out costs.
• Have reward of the Family Separation Allowance. In instances where you cannot take your family unit with you to your permanent duty station, which may occur if yous are on duty on a ship, a family fellow member has a medical condition and cannot motility, housing is unavailable, or transportation isn't authorized, you volition receive a apartment monthly rate payment to cover the separation. Make sure you have advantage of this.
• Decide which blazon of move is correct for you. When you receive a PCS, you have the option to take the war machine pay for your movement, or to pay for it yourself (personally procured) and ask for reimbursement. While the second option requires more work, it may save you coin. You will be paid the apartment rate for the move that the military expects it to cost, and yous can keep any extra that y'all save past finding a lower toll selection.
• Know what moving expenses are covered. Typically, the military volition pay for the actual toll of the move, shipment of your personal items, personal and dependent travel and whatsoever temporary housing you demand to take while yous look for a house or await for on-base housing to be fix.
• Utilize the Dislocation Allowance when you have to move. This allowance is paid one time per PCS move and will help embrace some of your moving costs. This is in addition to the other moving reimbursements you lot may receive.
• Asking Advance Pay. If y'all accept PCS orders, you can ask to receive advance pay for up to three months of your basic pay. This may give yous some of the money you need to pay for moving expenses upfront before you go the reimbursement or to cover your spouse's lost income while he or she looks for work at your new location. This advance is based on the approval of your immediate command. While you will not pay interest on advance pay, it volition be taken from your future paychecks. You lot nonetheless are required to pay accelerate pay loans back if you exit the service before you lot have finished paying the advance.
• Understand and apply the VA Dwelling Loan programme when applicative. When you are ready to buy a abode, consider whether or non yous authorize for the VA Home Loan programme. This home loan is designed for veterans and offers a no-down-payment, low-interest-rate government-backed loan. Though it is designed for qualified veterans, the VA Dwelling house Loan programme is also offered to active-duty service personnel who have 90 days of consecutive active duty or six credible years in the Selected Reserve or National Guard.

For more information about housing benefits, visit:

• InCharge.org: Living On- or Off-Base – Which Is Right for You?
• Rand Corporation: Why DO Military Families Live in On-Base of operations Housing
• Military OneSource: Moving Benefits
• Military machine Times: Moving

Education and Career Services

Ane of the perks that crusade many people to consider a armed forces career is the teaching benefit that service members receive. When you are in the military, you may be able to get almost of your education expenses paid for. Existing higher debt, future college tuition and even living expenses while you are in schoolhouse are all potentially covered because you are in the military. Non only that, but your family members may receive benefits for their teaching as well. When you are gear up to transition to noncombatant life, you will detect a number of benefits and resources that will help you brand that transition to a civilian career more hands.

Understanding these benefits is the key to using them well. Hither are some steps you can have to ensure you are taking full advantage of your armed forces teaching and career benefits and all that they offer your family.

• Take advantage of Tuition Help. Tuition assistance tin pay upward to 100% of your tuition expenses. This is limited to $250 per credit hour or $iv,500 per financial year per educatee. If you are a full time duty fellow member of the military machine, no matter your co-operative, you lot volition qualify from this. Tuition Aid amounts for Reserve and National Guard members will vary.
• Understand the changes that came with the Post-9/11 GI Pecker. After nine/eleven, the new GI bill stated that qualified veterans could receive full payment for public state undergraduate tuition and fees, along with an allowance for books and other supplies and a living stipend. To qualify, you must have served at least ninety days of continuous service afterwards September 10, 2001.
• See of your private higher or academy of choice participates in the Yellowish Ribbon Program. This program allows colleges or universities to offer to waive some of your educational costs if those costs are higher than what the Post-9/11 GI Bill allows for. The VA offers incentives to schools to provide the Yellow Ribbon Program. Since private colleges oftentimes cost much more than in-land public schools, this can let you to pursue the degree you want from the schoolhouse of your choice, with less toll.
• Utilise for loan repayment programs. If you enter the military machine with a college loan that y'all took out earlier your service, you lot may qualify for assistance paying down that debt past your service co-operative. Each branch has its own maximum loan repayment amount, but this tin can assist significantly.
• Test out of programs afterward your military machine service. Y'all will acquire many skills while you lot are in the service, and some of these skills may permit you to test out of required college classes. The Higher Level Equivalency Plan (CLEP) General Exams and Subject field Exams may let you to become college credit for the skills you lot have already learned. The DANTES Bailiwick Standardized Test is some other pick. You can also accept Excelsior Higher Exams to earn actual credits from Excelsior College that can transfer to your chosen school.
• Have your spouse have advantage of the Military machine Spouse Career Advancement Accounts (MyCAA). This program offers upwards to $4,000 in tuition assistance for spouses who are pursuing a degree in a portable career.
• Accept your children or spouse use the Survivor's and Dependents' Educational Help program. The DEA offers tuition assistance to survivors and dependents of service members who are killed or permanently disabled in the line of duty.
• Get tutoring if y'all need information technology. If y'all are receiving educational help through the VA and demand tutoring, yous tin can get a monthly stipend to cover the toll of your tutoring.
• If you are considering a trade career, consider on-the-job training or apprenticeships. The VA offers these programs to qualified veterans who are interested in learning a trade or skill that is not taught through formal classroom educational activity. Veterans who choose this route can use their GI Pecker benefit to receive a tax-free stipend while in their apprenticeship to help them pay for living expenses while they larn.
• Learn most transition programs. Moving from active duty to noncombatant work is not always easy. Transition programs help you get through this procedure and into a rewarding career. Options include resume writing help, interviewing training, networking workshops and task skills assessments.
• Translate your military skills into the skills needed for noncombatant jobs. Sometimes the work you did in the war machine translates well into a noncombatant job, but it is called something unlike. Vets.gov maintains a military skills translator that lets yous plug in your military skills to encounter what they are chosen in the civilian piece of work earth. This tin can aid y'all update your resume and cover letter with the terms hiring managers are looking to see.
• Get preference for sure federal jobs. The U.s.a. Department of Labor gives preferential treatment to some members of the military who are searching for work. Use the resources and apply for jobs through this program.
• Transfer unused Post-9/11 GI Bill benefits to your children or spouse . If y'all accept an unused didactics benefit offered under the Mail service-9/xi GI Bill, you can transfer it to qualified dependents, such as your child or spouse, to cover their educational expenses.

For more data well-nigh college and career benefits for military members, visit:

• Today'south War machine: Paying for College
• US Ground forces: Pedagogy Benefits
• U.s.a. Department of Veterans Diplomacy: GI Beak
• CareerOneStop: Veteran and Military Transition Center
• Rent Our Heroes: Veterans Resources

Keep Your Finances Under Command by Utilizing These Resources

Yes, existence in the military involves sacrifice, but you practise have benefits in return for that sacrifice. Take the time to learn all you lot tin can almost your potential military fiscal, educational, tax and housing benefits. Research these benefits carefully, and apply for those that you authorize to receive. After all, you earned or are earning these benefits with your service. Make certain you are getting the full amount yous deserve.

Source: https://blog.taxact.com/how-to-make-the-most-financially-out-of-your-military-career/

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