2 different questions: Cow Loan, Taxes.

Discussion in 'Military Academy - USMA' started by LLJ, Apr 8, 2016.

  1. LLJ

    LLJ Member

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    1) Cow Loan. Why would they need a loan? Unless its to buy a car. Are there surprise costs that year? Do their stipends not cover it all?

    2) Can we (parents) no longer claim our 18-19 yo college students as dependents? Not asking for tax advice, just wondering what others ahead of me have had to do or not do.

    Thanks. I love all the advice here. (i.e. I never would have imagined to buy insurance. So much to learn.)
     
  2. ChiTown

    ChiTown Member

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    No, you can not claim your Cadet on your taxes.
     
  3. ca2midwestmom

    ca2midwestmom Member

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    1. Cow loan -- hearing that some Cows use it to purchase a car, set up an IRA/savings, put it aside in anticipation of start-up costs after graduation (apt deposit, furnishings, etc), and some even blow it (not wise). My understanding is they can take as much or as little of the offered loan as they want and that financial planning is given.

    2. Once your CC reports on R-Day and starts Beast, you are no longer allowed to claim them in that tax year. It has to do with $$ provided in support for the year vs how many months your CC lived with you. WP provides more in $$ support for each cadet, even those starting as New Cadets. Read this, specifically #3 -- http://www.usma.edu/parents/SiteAssets/TaxInformationforParents2015.pdf

    As a side note to the tax question, there is a Tax Office on post offered free to cadets. They just have to fill out some basic information/paperwork no later than a week before Apr 15; the tax office can also do their state taxes. Cadets can use TurboTax or similar software packages if they prefer to do their own taxes, or they can have parents/someone else do their taxes.
     
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  4. tug_boat

    tug_boat Member

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    The Cadets are offered a loan during their third year or "Cow" year. Cadets are paid a stipend depending on what rank they are over the course of their 47 months. After monies is taken out for uniforms, haircuts, bullets they are left with $450 to 650 each month. The loan, up to $35,000 is at a rate of .5%, is intended to assist with Cadets expenses once they leave/graduate from the academy. USAA has a whole host of tools to assist them with managing their money.

    I know of a few Cadets whose fathers work in Wall Street and were able to return 200% of the loan. Now understand these dads are buying in the market at the whole sale level. I also know of Cadets who got hooked on day trading from their dorms and lost everything. Other Cadets bought a economical auto to travel and were very frugal with their funds. It all depends on how you taught them to manage money. If you are a type of parent who hides how money is used, or talks openly about money management your Cadet will most likely have your habits.

    Taxes: You much show you support your Cadet at least 6 months of the 12 months during the year. Food, housing, clothing etc. From R-Day on you as a parent can not legally claim them as a dependent. The Cadets will need to pay taxes on their own. During the tax season there are host of resources available for them to meet the dead line.

    Push Hard, Press Forward
     
  5. LLJ

    LLJ Member

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    Holy Cow! OK. I couldn't resist.
     
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  6. tug_boat

    tug_boat Member

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    I think we were set up

    Push Hard, Press Forward
     
  7. LLJ

    LLJ Member

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    As a plebe, who can barely go outside the walls or do anything, they don't have much need for that $400/month, do they? Maybe he can use it to fly home for holidays. I have to admit, I'm kinda surprised by all of this. ( happily) Are there expenses I don't know about? Do they pay for their club sports/activities out of that? That could definitely get expensive.

    thanks for puting up with my clueless questions! and bad puns.
     
  8. buff81

    buff81 Moderator

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    Oh they find ways to spend their money - Grant Hall, Netflix, Amazon (games etc), Starbucks to name a few.
    As they get older - renting houses for special weekends, trips to NYC ( or basically anywhere outside of West Point), restaurants in the area, the Firstie Club, ordering food from the local eateries that deliver, flying significant other up to visit, etc.
     
  9. USMA 1994

    USMA 1994 Member

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    The "Cow" loan doesn't come until the end of the year. It is primarily to buy a car and have a few $$$ extra. While the cadets are paid each month, most of it is taken for expenses the first two years. It has been a few years but I think I got $68 a month plebe year. I bought a car, my graduation ring and an engagement ring and my loan was gone. The are typically very low interest and don't require payment till after graduation. The banks do that to get customers. I still bank at the same place that gave me a loan.
     
  10. ca2midwestmom

    ca2midwestmom Member

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    Plebes don't get $400/month -- more like $150-200/month depending on if you paid all or part/none of the initial $2,000 deposit (if deposit was not paid or not paid in full, a cadet gets less pay each month Plebe & Yuk year; if paid, they get the full amount -- may be $200/mos Plebe year) . Cadet pay goes up incrementally each year. We paid 3/4 of the deposit with a scholarship (that was late) and a check, so my DS only got $150/month Plebe year; as a Yuk he gets $200 (class of 2018 is getting less than 2017 got as Yuks -- I think it had to do with the iPad requirement or other additional expenses, but basically Yuks are not getting the same amount that prior year Yuks got.) They should catch up by Cow year. I think it goes up ~$100-150/class year.

    If your NC is part of a club/sport that has trip sections (out-of-town trips), he may spend some of his pay for additional food. Transportation, etc should be covered by the club/sport. If your NC has to replace a piece of his uniform, buy toiletries, or want additional snacks etc. he will use his pay.

    Cadets are given book money at the beginning of each semester (actually well in advance of the semester) and learn early on how and where to buy (or trade) textbooks (Amazon.com, fellow cadets, etc). Any money not used on textbooks is theirs to keep.

    Additionally, "top off" is money in the "cadet account" (not personal bank account) that is available to cadets after the successful completion of Plebe year (but in August), and then after each semester. For my DS it's been a few hundred dollars each time. Cadets can take "top off" if there's any available and put it in their personal checking/savings accounts. The way my DS explains it is that if he didn't take "top off" it rolls back into his cadet account (this is the account the Treasurer manages for yearly expenses/uniforms/haircuts & laundry, etc). I don't know if that means a larger amount may be available the next semester. Either way, my cadet looks forward to taking "top off" and putting it into his own account. Here's the treasurer's expense summary for the class of 2019 so that you can see a lot of expenses are upfront during Plebe year, and then larger again Firstie year -- http://www.usma.edu/parents/SiteAssets/EXPENSES CLASS 2019 MEMO.pdf

    BTW, the expenses listed above are non-negotiable. If your NC decides to do his own laundry in the barracks, he's still going to be charged the laundry fee.

    Your NC may or may not have many expenses besides those I mentioned above, besides trips home, trips for spring break, or trips into NYC with fellow cadets on pass. It all depends on if your NC is a saver or spender.
     
    Last edited: Apr 8, 2016
  11. USMAROTCFamily

    USMAROTCFamily Member

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    Our Plebe gets $200/month. I've been surprised just how many passes he has been given this year. He has made several trips into the city with his buddies and they get hotels, go out to shows, etc. We have paid for his 2 trips home this year (Christmas break and Spring Break).
     

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