Active-Duty Military Pay and Benefits Part Two

As mentioned in our previous post on Active-Duty Military Pay and Benefits, this is section two of benefits that most personnel may not aware of. 

Section II: Special Tax Benefits for Military Personnel

1. Moving Expenses
Military allowances for PCS moving expenses will be paid for members of the Armed Forces, on active-duty status. Service members who move because of a permanent change of duty station receive this military pay compensation. Moving expenses can also be deducted if you are out of the military and your move is closely related to the start of a new job location, and you meet certain tests. You are entitled to a deduction for reasonable, unreimbursed moving expenses related to travel and the cost of moving household goods and personal belongings.

2. Combat Pay
Most enlisted military personnel or warrant officers know that if they serve in a combat zone for any part of a month, all of their pay received for military service during that month is not taxable. Military officers are eligible to receive tax free pay as well but it could be capped at the highest enlisted pay, plus hostile fire or imminent danger pay received. One little known fact is that you can elect to include your nontaxable combat pay in your ‘earned income’ for purposes of claiming the Earned Income Tax Credit.

3. Extension of Deadlines
Qualifying members of the military can get an automatic extension for filing tax returns, paying taxes, filing claims for refund, and taking other actions with the IRS.

4. Military Uniform Cost and Upkeep
You can deduct the cost and upkeep of uniforms that military regulations prohibit you from wearing when off duty. If you receive any allowance or reimbursement for the services you receive you will need to reduce your expenses by those amounts.

5. Joint Returns
A power of attorney may be used on joint income tax returns if one spouse is unavailable due to military duty.

6. Travel to Reserve Duty
If you are a member of the US Armed Forces Reserves, you can deduct unreimbursed travel expenses for traveling more than 100 miles away from home to perform your reserve duties.

7. ROTC Students
Subsistence allowances paid to ROTC students participating in advanced training are not taxable. However, active-duty pay – such as pay received during summer advanced camp – is taxable.

8. Job Hunting Expenses
You may be able to deduct some costs you incur while looking for a new job after separating from the military. Expenses may include travel and outplacement agency fees.

9. Forgiveness of Decedent’s Tax Liability
Tax liability can be forgiven, or refunded if already paid, if a member of the U.S. Armed forces dies while in active service in a combat zone; from wounds, disease, or other injury received in a combat zone; or from wounds or injury incurred in a terrorist or military action. If filing a joint return only the decedent’s part of the joint income tax liability is eligible for the refund or tax forgiveness.

10. Tax Help
Most military installations offer free tax filing and preparation assistance during and/or after the tax filing season.

11. Earned Income Tax Credit
Tax credit designed to lessen the tax burden for individuals and families with lower income. Qualified individuals and families can receive anywhere from $450- $5,000. The taxpayer must be between 25 and 65 years old, have an earned income and make less than $3,150 in investment income. For military personnel, they would be interested in the EITC because combat pay is not included in a service member's income, making it easier to meet the income requirements for qualification.

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Sources:

1. US Military Pay and Benefits
http://usmilitary.about.com/od/militarypay/u/pay_and_benefits.htm#s1

2. 9 Commonly Missed Tax Benefits for Military Personnel
http://www.taxslayer.com/blog/post/2012/07/23/9-%E2%80%98Commonly-Missed%E2%80%99-Tax-Benefits-for-Military-Personnel.aspx

3. Military.com
http://www.military.com/benefits/military-pay/special-pay?comp=7000023431425&rank=2
http://www.military.com/join-armed-forces/military-benefits-overview.html
http://www.military.com/money/personal-finance/taxes/top-tax-tips-for-military-personnel.html

4. Military Tax Tips & Tricks: Deductions and Credits
http://www.veteransunited.com/money/military-tax-tips-tricks-deductions-and-credits/

5. Special Tax Benefits for Armed Forces Personnel
http://blog.taxbrain.com/federal-income-taxes/special-tax-benefits-for-armed-forces-personnel/

108 Solutions Military Loans and Financing Offers Cheap Military Flights for Valentine's Day

Do you need that special someone in your life this Valentine's Day? Don't worry, 108 Solutions has cheap military flights to make that happen! With our help, the most affordable military travel is just minutes away. We offer cheap military vacation packages that include all you need to make your travels hassle-free - rental cars, hotels, and luxury cruises for the lucky lady! Plan on proposing to your lover on a romantic getaway? View our large selection of engagement rings starting as low as $50/month.

All of us at 108 Solutions would like to wish you a Happy Valentine's Day and safe travels!

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Active-Duty Military Pay and Benefits Part One

Everyone in the military serving the U.S. Department of Defense could use a tax break. For this reason, we have prepared this article to inform you, our customers/subscribers/readers, of some of the most common military tax benefits available for all active-duty military personnel. Special military pay and other benefits of joining the military, that are seldom talked about, will be presented as well. There are various benefits of going into the military, so it is our job at 108 Solutions to make sure that all service members receive the substantial military compensation available to them. It is our intention to shed light on a few of the ways to get yourself ahead. We have split this article into two separate sections for you to easily comprehend and understand these benefits. The content listed below is the most common Military Pay and Benefits and stay tuned for tomorrows blog post regarding Special Tax Benefits for Military Personnel.

Section I: Military Pay and Benefits

1. Military Pay
Military Pay is the service member’s monthly base pay which is based on their rank and time in service. Logically, a promotion to a higher rank, often called an advancement, will always increase a service member’s pay. In addition, the longer a service member is actively enlisted, the more his/her pay will increase as time in service extends.

2. Housing and Housing Allowances
The Military offers free or subsidized housing to all of its enlisted members - one of the many benefits of the military. Single (unmarried), junior enlistees usually live on-base in the barracks or dormitories. Senior, unmarried enlisted members and single officers usually live off-base and receive a monthly housing allowance. Military personnel who are married, usually live on-base in government family housing, or in on/off-base contact housing. For personnel who choose to live off base, a housing allowance is typically received which is not taxable. This is just one of the many benefits of getting married in the military. Our government definitely does its best to offer benefits to military spouses.

3. Special Pays
Depending on the circumstances of the term, military members can be entitled to “extra” pay. A member may be eligible for some of the following pays depending on rating (MOS) and assignment (location and duty). These payments are subject to income tax, unless earned in a designated combat zone which is a tax free area for military - just another military tax benefit. Some of the most common special pays are:

• Hardship Duty Pay (HDP)
• Hostile Fire Pay/Imminent Danger Pay (HFP/IDP)
• Assignment Incentive Pay (AIP)
• Hazardous Duty Incentive Pay (HDIP)

4. Re-Enlistment Bonuses
Military members who decide to extend their service, can receive an extended amount of re-enlistment bonuses. These types of bonuses depend on the “multiplier” assigned to that job, the member’s current rank, current base pay, time in service, and the number of years the member is re-enlisting for. This pay varies for each branch and can change to meet the needs of the service.

You may be eligible if:

• You have completed at least 17 months of continuous active duty (training not included) but no more than 14 years of active-duty
• You are qualified in a military skill designated as critical by the Secretary of Defense, or by the Secretary of Homeland Security, with respect to the Coast Guard
• You are not currently receiving special nuclear-training pay
• You re-enlist or voluntarily extend your enlistment for a period of at least three years

5. Education Benefits
Military personnel have the ability to begin, continue, or complete a college education after their service term is finalized. Through the Montgomery G.I. Bill, Tuition Assistance programs, Servicemember Opportunity Colleges, and Education on Duty, the U.S Armed Forces offers its members the GI Bill benefit of obtaining a higher education.

6. Miscellaneous Allowances
Military members are entitled to various benefits including medical care, dental care, discount shopping, recreational activities, Space-Available aircraft travel, leave (vacation time), and more. Enlisted military may also be entitled to one or more special allowances depending on circumstances revolving their term. These allowances include the following:

• Food Allowance (BAS)
• Dislocation Allowance
• Family Separation Allowance
• Child Support Allowance
• Clothing Allowance
• Adoption Reimbursement

Keep in mind, in most cases, these allowances are not subject to income tax. 

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108 Solutions Military Discounts in Oceanside, California

Local businesses take pride in our Armed Forces and offer you something special in return to say thank you for your service! Many retailers for apparel: Banana Republic and Foot Locker, restaurants: Applebee’s, and movie theaters: Regal Movie Theaters, offer a reasonable discount for military purchasing their products and services.

The team here at 108 Solutions wanted to search further into a local business in Oceanside, California near one of the biggest Marine bases, Camp Pendleton, to bring an offer to your attention that is available just around the corner.

 

Wings Pizza n Things

4225 Oceanside Boulevard

Oceanside, CA 92056

(760) 631-4700

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Every Monday night, Wings Pizza n Things offers a great Military Discount of 20% off your entire order. As if the 20% discount off of your meal wasn’t already enough, they also offer a great two-for-one happy hour special with buy one get one free well drinks and draft beers. All of this makes Wings Pizza n Things a perfect option for our busy service men and women to unwind after a hard day. Active Duty, Retirees, Reservists, and Dependents are all eligible for this discount.

This Oceanside military discount has been brought to you by 108 Solutions Military Loans and Financing - The #1 Choice for Military Financing. Not only do we specialize in active-duty military and Government employee financing for laptop computers, 108 Solutions also takes great pride in its list of retailers who offer military discounts. We know life is difficult, so in any way we can we hope to make your life a little bit easier.

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How to Read a Leave and Earnings Statement (LES)

As mentioned in our previous post, today's article is the extensive breakdown of each section of a Military Leave and Earnings Statement (LES). Below is the exact order of information as it is displayed on your LES along with a brief description of each abbreviation and code. Listed in our last post is an example of a blank LES to use as a reference. 

Defense Finance and Accounting Service Military Leave and Earning Statement (LES)

First Row of Fields:
Name: Last, first, and middle initial
Social Security Number: A nine-digit number issued to U.S. citizens, permanent residents, and temporary (working) residents. The number is issued to an individual by the Social Security Administration, an independent agency of the United States government. Its primary purpose is to track individuals for Social Security purposes.
Grade: Members current pay grade/rank
Pay Date: The date in which the member enlisted to Active-duty in YYMMDD format.
YRS SVC: Years in service
ETS: Expiration Term of Service in YYMMDD format. This is the end of a service member’s current enlistment.
Branch: Branch of service (ex. Navy, Marines, Army, Air Force, Coast Guard, etc.)
ADSN/DSSN: Number used to identify each disbursing/finance office.
Period Covered: Period covered by the LES. It will normally be for one calendar month.

Second Row of Fields: (Body of the LES)
Entitlements: This section is a breakdown of your pay and allowances. Base pay, Basic Allowance for Housing (BAH) and Basic Allowance for Subsistence (BAS) are commonly included. Cost of Living Allowances, Overseas Housing Allowances, incentive pay, bonus pay and hazardous duty pay may be included in this section as well.

Deductions: This is where tax and other deductions are broken down. Most common deductions include Federal and State taxes, Social Security, Servicemembers’ Group Life Insurance (SGLI) and Family SGLI, and TSP withholdings. On end-of-the-month statements, a mid-month pay deduction is included to isolate pay from the second half of the month only. A 50 cent monthly allotment is also deducted for the Armed Forces Retirement Home (AFRH).

Allotments: This section includes the actively paying allotments that you have set up on your military pay stub. Most commonly, allotments are set up on an LES for military financing. These are deducted from your earnings on the 1st and 15th of every month. Allotments can only be set up on an LES for active-duty military. Allotment examples could be any funds being transferred to a checking/savings account, loans, bills, bonds, etc.

Summary: This section includes the following:

1. +Amt Fwd: Total amount of unpaid amounts from previous LES
2. +Tot Ent: Total of all entitlements listed
3. -Tot Ded: Total deductions from the deduction section
4. -Tot Allt: Total allotments from the allotment section
5. =Net Amt: Dollar value of amounts forwarded and entitlements minus total deductions and allotments
6. -Cr Fwd: Unpaid amounts that will appear on the following LES statement
7. =EOM Pay: Actual amount of the paycheck (End of Month Pay)

Third Row of Fields:
Leave:

1. BF Bal: Brought forward leave balance. This is the number of days of leave carried over into the new fiscal year.
2. Ernd: The cumulative amount of leave earned in the current fiscal year or term of enlistment
3. Used: The cumulative amount of leave used in the current fiscal year or term of enlistment
4. Cr Bal: Current leave available as of the end of the period covered
5. ETS Bal: The projected leave available to the expiration term of service
6. Lv Lost: The number of leave days that lost during the cycle
7. Lv Paid: Leave days awarded to date
8. Use/Lose: The number of days that will be lost if not taken in current fiscal year on a per/month basis

Fed Taxes:

1. Wage Period: Amount of earned income subject to federal taxes
2. Wage YTD: Year-to-date earnings subject to federal taxes
3. M/S: Marital status - M = Married and S = Single
4. Ex: Number of exemptions claimed
5. Add’l Tax: Additional amount specified to be withheld from each paycheck
6. Tax YTD: Total amount of federal taxes withheld from the calendar year

Fourth Row of Fields:
FICA Taxes:

1. Wage Period: Amount earned in the period that is subject to FICA
2. Soc Wage YTD: The wages earned year-to-date subject to FICA
3. Soc Tax YTD: Cumulative total of FICA withheld throughout the year
4. Med Wage YTD: The wages earned year-to-date that are subjected to Medicare
5. Med Tax YTD: Cumulative total withheld for Medicare this year

State Taxes:

1. St: Member elected state of residence
2. Wage Period: The amount retained from this period for state income tax
3. Wage YTD: The wages earned year-to-date subject to state taxes
4. M/S: Marital Status - M = Married and S = Single
5. Ex: The number of exemptions claimed for state income tax
6. Tax YTD: Cumulative total of state income tax withheld through the year

Fifth Row of Fields:
Pay Data:

1. BAQ Type: Type of basic allowance for quarters being paid
2. BAQ Depn: A code indicating the type of dependents claimed
• A-Spouse
• C- Child
• D- Parent
• G- Grandfather
• I- Member married to member/own right
• K- Ward of the court
• L- Parents in Law
• R- Own right
• S- Student
• T- Handicapped child over age 21
• W- Member married to member, child under 21
3. VHA Zip: The zip code used to compute Variable Housing Allowance
4. Rent Amt: The amount of rent paid for housing
5. Share: Number of individuals sharing housing costs
6. Stat: Variable Housing status: Accompanied or Unaccompanied
7. JFTR: Joint Federal Travel Regulation location. Determines COLA
8. Depns: The number of dependents in terms of VHA
9. 2D JFTR: JFTR code based on location of dependents
10. BAS Type: Type of Basic Allowance for Subsistence
11. Charity YTD: Cumulative amount of charitable donations for the calendar year
12. TPC: This section is not utilized by active segments, but will contain a letter specifying a training program
13. PACIDN: The activity Unit Identification Code (UIC)

Sixth Row of Fields:
Thrift Savings Plan (TSP): A contribution to the Federal Employees Retirement System.

Seventh Row of Fields:
Remarks: Any unusual notice of starts, stops or other information from command that may be important
YTD Entitle: Cumulative total of entitlements for the calendar year
YTD Deduct: Cumulative total of deductions for the calendar year

Conclusion:
With the information provided above, we hope you now have a better understanding of your LES military pay stub. The LES military pay codes and abbreviations can be quite challenging to understand, but with the extensive breakdown of each section we have provided you, reading your military Leave and Earnings Statement should be more successful. 108 Solutions hopes it has done a good job explaining your military Leave and Earnings Statement and that we have solved any questions you previously had. But if you still have additional difficulties with understanding your LES, please contact your disbursing/finance office for further questions or feel free to contact the 108 Solutions Team!

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