Retirement Pay?

pilotyip

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Anyone else see a reduction in the Fed Income tax With holding? Mine dropped about 20% is this a simulus package or something?
 

skiddriver

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Mine did as well. It's a pain because it just means I have to increase the withholding manually in either the retirement system or in my current job. We didn't get a tax cut, they're just trying to put more money in our pockets so we'll spend and invigorate the economy.
 

pilotyip

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just got the explanation in the mail. "The american recovery and reinvestment act of 2009 changed the amount of Fed Income Tax withheld" Are they also changing the tax rates so I pay less next year?
 

VVJM265

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I got an extra 66 bucks in my retirement check - woohoo! :nuts:
 

SIG600

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I'm actually paying more... single guy making a >$95K year... just doing my part to carry the free loaders I guess.
 

skiddriver

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just got the explanation in the mail. "The american recovery and reinvestment act of 2009 changed the amount of Fed Income Tax withheld" Are they also changing the tax rates so I pay less next year?
It depends on your income level. I hit that magic number where I pay neither more nor less than the previous year. So I had to manually increase my witholding to compensate.
 

Andy Neill

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There was $44 less withholding this check. Of that I got $26 and my ex gets $18. THe change doesn't do me any favors. Without the change, I would have gotten that all in a tax refund. Now that $18 per month is gone forever.
 

milky

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Your taxes stay the same. So, if your withholding was set correctly to get zero refund, you need to start setting it aside to pay your tax bill at the end of the year.
 

SIG600

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So if I got a fat refund this year, I can expect significantly less next year? Because according to Pres. Obama's campaign website 6 months ago, his tax plan would yield me $1600 more in my pocket, can't wait for the responses of the people that voted for him.
 

pilotyip

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The Answer

Taxpayers to Get Rude Surprise

May 04, 2009Associated Press
WASHINGTON - Millions of Americans enjoying their small windfall from President Barack Obama's "Making Work Pay" tax credit are in for an unpleasant surprise next spring.
The government is going to want some of that money back.
The tax credit is supposed to provide up to $400 to individuals and $800 to married couples as part of the massive economic recovery package enacted in February. Most workers started receiving the credit through small increases in their paychecks in the past month.
But new tax withholding tables issued by the IRS could cause millions of taxpayers to get hundreds of dollars more than they are entitled to under the credit, money that will have to be repaid at tax time………Retirees who have federal income taxes withheld from pension benefits also are getting an income boost as a result of the new withholding tables. However, pension benefits are not earned income, so they don't qualify for the tax credit. That money will have to paid back next year when tax returns are filed.
More than 20 million retirees and survivors receive payments from defined benefit pension plans, according to the Employee Benefit Research Institute. However, it is unclear how many have federal taxes withheld from their payments.
The American Federation of State, County and Municipal Employees union raised concerns about the effect of the tax credit on pension payments in a letter to Treasury Secretary Timothy Geithner in March. Geithner responded that Treasury and IRS understood the concerns and were "exploring ways to mitigate that effect." Rep. Dave Camp of Michigan, the top Republican on the tax-writing House Ways and Means Committee, said Geithner has yet to respond to concerns raised by committee members. "So far we've got the, 'If we don't address this maybe it will go away' approach," Camp said.
 

SIG600

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Fairtax alleviates all this bureaucratic BS. Bring it, it's time for change.
 

Ih8AFYesmen

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On a different note but related to retirements, can someone tell me how to figure out the reserve/guard retirement using years of service and total points? Thanks in advance.
 

pilotyip

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On a different note but related to retirements, can someone tell me how to figure out the reserve/guard retirement using years of service and total points? Thanks in advance.
The way I understand it which also pretty much matches my pay. Take your total points, act duty plus drills, when you stop drilling, divide it by 7200. This represents the percentage of your active duty counter part retirement you will recieve. Take the pay rate for the year you will turn 60, you will then take 50% the max base pay for your rank/rate and multiply it by your points over 7200 percentage and that should be your retirment pay at age 60.
 

ExAF

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Changed It

I went on SurePay and increased my withholding to get close to what it was before the change. They aren't taxing you less, just witholding less. It is income dependent, but most likely if you don't go and increase your witholdings you could end up owing or getting back a lot less come tax time next year.
 
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