Pay attention boys and girls - 'specially you Auld Pharts who are working, and drawing retired pay, and maybe even tapping into Social Securty and getting that sweet VA disability...
Our Congress and President are looking out for us. Which means your wallet is in danger.
First up - if you get VA or Social Security, you're getting a gift of $250. That's a taxable payment, btw.
Then, in order to give you some more money (Which you're darn well supposed to go out and spend, dammit!), they're going to reduce the witholding from your working income. By $400 single/$800 married filing jointly. Mind you - they're reducing your witholding, *not* your tax liability.
That means that little refund you managed this year might well be a tax bill next year. But wait - it gets better for you working retirees!
They're going to effect that reduction on *both* those paychecks. Catch that? You're going to have your witholding reduced up to $1600. So, assuming little change in your status and income this year, that $300 refund you got this year becomes a $1300 *bill* you'll owe next year.
And it all happens automatically. Unless you *tell* DFAS and your employer to withold at the previous level.
Nothing wrong with it - it's nice they're going to let you have more of your money, rather than taking that as an interest free loan. But *you* have to remember, your *tax* hasn't changed. Just when you pay it has. Which is no big deal, if you plan *now.* It is a big deal, especially if you are living to the limit of your income, when April 15 rolls around next year.
More detail here, at MOAA. H/t, Ron W.
Update: Talked with my CPA over lunch about this years taxes and brought this up - and I've got this a little wrong. If you have one income, you're going to get the witholding credited back as a part of your tax filing. If you have multiple earned incomes - such as military retirement and a job, that's where you're going to get hit with the whammy. So, my example changes from a $300 refund to a $500 bill. Still not trivial, but not quite the bite to crunch as it originally seemed.
Our Congress and President are looking out for us. Which means your wallet is in danger.
First up - if you get VA or Social Security, you're getting a gift of $250. That's a taxable payment, btw.
Then, in order to give you some more money (Which you're darn well supposed to go out and spend, dammit!), they're going to reduce the witholding from your working income. By $400 single/$800 married filing jointly. Mind you - they're reducing your witholding, *not* your tax liability.
That means that little refund you managed this year might well be a tax bill next year. But wait - it gets better for you working retirees!
They're going to effect that reduction on *both* those paychecks. Catch that? You're going to have your witholding reduced up to $1600. So, assuming little change in your status and income this year, that $300 refund you got this year becomes a $1300 *bill* you'll owe next year.
And it all happens automatically. Unless you *tell* DFAS and your employer to withold at the previous level.
Nothing wrong with it - it's nice they're going to let you have more of your money, rather than taking that as an interest free loan. But *you* have to remember, your *tax* hasn't changed. Just when you pay it has. Which is no big deal, if you plan *now.* It is a big deal, especially if you are living to the limit of your income, when April 15 rolls around next year.
More detail here, at MOAA. H/t, Ron W.
Update: Talked with my CPA over lunch about this years taxes and brought this up - and I've got this a little wrong. If you have one income, you're going to get the witholding credited back as a part of your tax filing. If you have multiple earned incomes - such as military retirement and a job, that's where you're going to get hit with the whammy. So, my example changes from a $300 refund to a $500 bill. Still not trivial, but not quite the bite to crunch as it originally seemed.
Apologies to weasels.
No down side to that. Even liberals learn when you take their money from them for bullshit programs.