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Military Retirees?
- Thread starter Frosty
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I found it all entirely helpful.
I am not retired from the military, I am 100% disabled. So, I pay no taxes yes?
Well, somewhere, I read that since I am under retirement age and had an eligible child last year, i could get a refund.
I am actually 90% but considered 100% because I am total and permanent.
I am 51 years old.
Beth
I have no receipts to send to add to the others.
I found it all entirely helpful.
I am not retired from the military, I am 100% disabled. So, I pay no taxes yes?
Well, somewhere, I read that since I am under retirement age and had an eligible child last year, i could get a refund.
I am actually 90% but considered 100% because I am total and permanent.
I am 51 years old.
Beth
I have no receipts to send to add to the others.
Quote:
Mac, I understood what you said...I used to do my own taxes. Thanks for explaining it all!
Mac, I understood what you said...I used to do my own taxes. Thanks for explaining it all!
Mac, I understand about withholding. We've changed it several times so they didn't keep so much $$, but can't hit on exactly the right amount. I don't want to pay an extra dime to them if I don't have to.
Quote:
I found it all entirely helpful.
I am not retired from the military, I am 100% disabled. So, I pay no taxes yes?
Well, somewhere, I read that since I am under retirement age and had an eligible child last year, i could get a refund.
I am actually 90% but considered 100% because I am total and permanent.
I am 51 years old.
Beth
I have no receipts to send to add to the others.
No, you don't have to pay any taxes on VA disability benefits. If you are also receiving Social Security disability benefits, then some Social Security benefits may be taxable if your household taxable income is high enough.
Are you receiving Social Security disability? If you are permanently disabled you may want to check into your benefits under Social Security. Their system is completely different from the VA's though. There are no percentages, either you are disabled or you aren't, nothing in between...
If you have a qualifying dependent you may be eligible for additional VA or SS disability payments, if you are not receiving them already.
There are some refundable tax credits available for low income families; e.g., Earned Income Credit, and Child Tax Credit, but generally you need to have some earned income (regular employment wages) to qualify. I'm not well versed in those areas though, so you may want to check with a tax professional.
I found it all entirely helpful.
I am not retired from the military, I am 100% disabled. So, I pay no taxes yes?
Well, somewhere, I read that since I am under retirement age and had an eligible child last year, i could get a refund.
I am actually 90% but considered 100% because I am total and permanent.
I am 51 years old.
Beth
I have no receipts to send to add to the others.
No, you don't have to pay any taxes on VA disability benefits. If you are also receiving Social Security disability benefits, then some Social Security benefits may be taxable if your household taxable income is high enough.
Are you receiving Social Security disability? If you are permanently disabled you may want to check into your benefits under Social Security. Their system is completely different from the VA's though. There are no percentages, either you are disabled or you aren't, nothing in between...
If you have a qualifying dependent you may be eligible for additional VA or SS disability payments, if you are not receiving them already.
There are some refundable tax credits available for low income families; e.g., Earned Income Credit, and Child Tax Credit, but generally you need to have some earned income (regular employment wages) to qualify. I'm not well versed in those areas though, so you may want to check with a tax professional.
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It sounds like you are right on the money for state, but you don't need to pay into federal. If he withholds at the married rate on the W-4 then his withholding is going to increase about $50 a month, which will be an additional $500 paid in this year, on top of the $500 that you already saw last year.
It can be hard to hit it right on the head though.
This how they figure your 2011 federal withholding for a married couple with a monthly paycheck under $2075:
They subtract $308.33 from your taxable income for each allowance that you claim.
They then withhold 10% of the amount remaining over $658.
Claiming 4 exemption allowances would mean zero withholding for any paycheck under $1900.
It sounds like you are right on the money for state, but you don't need to pay into federal. If he withholds at the married rate on the W-4 then his withholding is going to increase about $50 a month, which will be an additional $500 paid in this year, on top of the $500 that you already saw last year.
It can be hard to hit it right on the head though.
This how they figure your 2011 federal withholding for a married couple with a monthly paycheck under $2075:
They subtract $308.33 from your taxable income for each allowance that you claim.
They then withhold 10% of the amount remaining over $658.
Claiming 4 exemption allowances would mean zero withholding for any paycheck under $1900.
I looked up those numbers in the withholding tables, but each exemption is generally worth the personal exemption for the year divided by the number of paychecks:
$3700 / 12 = 308.33
The "10% of the amount over $658" is derived from that income being in the 10% tax bracket. The $658 is derived form the standard deduction for married couples, minus one personal exemption, divided by the number of paychecks.
(11600 - 3700) / 12 = $658.33
The withholding tables are based on that specific income being the taxpayer's only source of income for the year, with the taxpayer claiming the standard deduction and one exemption allowance for each person included in the tax return.
If you have you have more than once source of income, have itemized deductions beyond the standard deductions, or have tax credits available to you, it is up to you to adjust your withholding appropriately.
$3700 / 12 = 308.33
The "10% of the amount over $658" is derived from that income being in the 10% tax bracket. The $658 is derived form the standard deduction for married couples, minus one personal exemption, divided by the number of paychecks.
(11600 - 3700) / 12 = $658.33
The withholding tables are based on that specific income being the taxpayer's only source of income for the year, with the taxpayer claiming the standard deduction and one exemption allowance for each person included in the tax return.
If you have you have more than once source of income, have itemized deductions beyond the standard deductions, or have tax credits available to you, it is up to you to adjust your withholding appropriately.
In 2009 and 2010, in lieu of sending an economic stimulus check to everybody, they gave each individual a $400 tax credit, $800 for married couples.
To get the money into people's pockets right away, instead of getting it back as a tax refund at the end of the year, they reduced the withholding rates to account for the tax credit. For those that claimed "Single" on their W-4 they reduced withholding by $400, for those that claimed "Married" on their W-4, they reduced withholding by $600 (the $600 was a compromise because it would be unknown if the spouse was also employed or not and would also have reduced withholding).
So, for a monthly paycheck, withholding was reduced by $33.33 a month for Single W-4's and $50 a month for Married W-4's.
Military pensions alone didn't qualify for the tax credit, but since withholding tables are applied across the board, they withheld $400 or $600 less on our pensions regardless. If a person had multiple incomes they withheld $400 or $600 less on every income which may have resulted in many people coming up very short on tax withholding at the end of the year. Many payroll departments alerted their employees to that fact when all of this started, and many adjusted their W-4's to have additional amounts withheld to keep from coming up short and having a huge tax bill at the end of the year.
Now that that tax credit has expired, we are seeing that withholding being added back in. $33.33 a month for Single W-4s and $50 a month for Married W-4s. Unless folks with multiple incomes once again adjust their W-4's to account for the extra money being withheld, they are going to see a huge tax refund at the end of the year. While some may appreciate that, most would benefit by having that money back in their paychecks. In effect, we have a "reverse economic stimulus" going on right now because many haven't received pay raises and their net pay has gone down because of the excess withholding that has been created by this situation.
Capiche?
To get the money into people's pockets right away, instead of getting it back as a tax refund at the end of the year, they reduced the withholding rates to account for the tax credit. For those that claimed "Single" on their W-4 they reduced withholding by $400, for those that claimed "Married" on their W-4, they reduced withholding by $600 (the $600 was a compromise because it would be unknown if the spouse was also employed or not and would also have reduced withholding).
So, for a monthly paycheck, withholding was reduced by $33.33 a month for Single W-4's and $50 a month for Married W-4's.
Military pensions alone didn't qualify for the tax credit, but since withholding tables are applied across the board, they withheld $400 or $600 less on our pensions regardless. If a person had multiple incomes they withheld $400 or $600 less on every income which may have resulted in many people coming up very short on tax withholding at the end of the year. Many payroll departments alerted their employees to that fact when all of this started, and many adjusted their W-4's to have additional amounts withheld to keep from coming up short and having a huge tax bill at the end of the year.
Now that that tax credit has expired, we are seeing that withholding being added back in. $33.33 a month for Single W-4s and $50 a month for Married W-4s. Unless folks with multiple incomes once again adjust their W-4's to account for the extra money being withheld, they are going to see a huge tax refund at the end of the year. While some may appreciate that, most would benefit by having that money back in their paychecks. In effect, we have a "reverse economic stimulus" going on right now because many haven't received pay raises and their net pay has gone down because of the excess withholding that has been created by this situation.
Capiche?
VERY WELL EXPLAINED, I think.
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