USNA Pay and taxes

Discussion in 'Naval Academy - USNA' started by MJOmom, Jun 21, 2009.

  1. MJOmom

    MJOmom Member

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    OK ... so plebes and such actually get "paid" $900 a month, most of which is used to offset expenses. They get $100 a month plebe year -- $400 by the firstie year ... what are the tax obligations? how do they report, track it? what kind of taxes do they owe?
     
  2. marvin7794

    marvin7794 Member

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    Mids get paid like everyone else in the military does, through DFAS. Both Federal and State (where applicable) taxes are deducted. This means that your kid has to grow up in April and learn how to use turbo tax. I made some cash every year by doing peoples taxes in company. Tell your kid to go to Midshipman finance if they have any outstanding questions about these things. Their first resource should be dfas.mil. It is wise to change state of residence to a non income tax locale after graduation.
     
  3. SteveHolt243

    SteveHolt243 Member

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    When you get your DFAS online account set up, sign on to it regularly. It'll seem like some silly thing the upperclass is telling you to do, but it's a huge pain to set up, and deactivates if you don't sign on every so often. If you pay close attention, you may even be able to understand your academy pay by firstie year if you carefully read your LES.
     
  4. LineInTheSand

    LineInTheSand USCGA 2006

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    Make sure you get down the LES pretty fast.....leave days are on there....and then one a year....something that looks EXACTLY like your LES comes in the mail but has a little "Important Tax Information" on it.....DON'T throw that away.


    Turbo Tax is beautiful, by the way.
     
  5. USNA'02

    USNA'02 Member

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    Definatley make sure your plebe gets set up w/ their DFAS account. They can actually shut off the paper LES stuff so it doesn't get sent in the mail. Also, DFAS keeps at least a years worth of your LES as well as 2-3yrs I believe of your W-2 statements and if you need to go back further you can call them.

    Not sure what kind of training the plebes or even mids get on LES but make sure your plebe knows how to read his/her LES. Eventually when they enter the fleet they WILL have to explain it to their sailors, trust me. Not to mention, the government has known to make a few mistakes and either take money from you accidently or not paid you enough so make sure your plebe is checking their LES monthly to see where their money is going.
     
  6. kamajama

    kamajama Member

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    It would help to know what DFAS and LES mean
     
  7. marvin7794

    marvin7794 Member

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    It would help to know what DFAS and LES mean wouldn't it. Is your google broke?
     
  8. Profmom2

    Profmom2 Member

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    DFAS - Defense Accounting - agency that pays our Mids.

    The Mids do not get paper paystubs - they do need to set up an online log in to the system. They will learn all about this during Plebe year. At least in my son's company - personal finance was a part of Plebe training. He was required to set up quicken and do a budget. He got a booklet from the Academy that outlined how to read the paystub (they are more complicated than most corporate paystubs) and how pay was administered for the 4 years and the deductions that would appear. It also outlined the payback of the ACE loan and what the ACE loan was used for - uniform issues etc.

    Both federal and state (your Mids home state of record) taxes are deducted and income tax must be filed at both the state and federal level (unless you live in a non income tax state) Even though the take home pay is only $100 per month for a plebe - they, just like the rest of us, pay taxes on the gross. What mostly becomes the issue is if you will claim the Mid as a dependent or not. This topic should be between you, your mid and your tax accountant and not for this forum to make judgement as it is a personal issue. You will get all sorts of opinions and you will need to sort it out for you and your Mids situation and interpretation of the tax code.
     
  9. basilrathbone

    basilrathbone Member

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    Not sure what kind of training the plebes or even mids get on LES but make sure your plebe knows how to read his/her LES. Eventually when they enter the fleet they WILL have to explain it to their sailors, trust me. Not to mention, the government has known to make a few mistakes and either take money from you accidently or not paid you enough so make sure your plebe is checking their LES monthly to see where their money is going.[/QUOTE]

    I'd like to highlight this last point. It's very important to get to know the LES. We've had pay problems a number of times over the years. When you're overpaid it's especially important to note the error right away since Cleveland will send you a bill for the total amount due immediately. Their repayment plan for overpayment can be beyond confusing as well. For instance the remedy for our most recent underpayment was a lump sum reimbursement, deletement of that pay, reinstatement of the pay for an incorrect amount, monthly withholding of several hundreds of dollars of pay to compensate for the lump sum payment, with assurances from DFAS that it's just the way "the computer" has to work it's way through the system. Be especially watchful during times when special pays get added or deleted since that's where I've noted the most common problems. It's the last thing you want to deal with during deployments but that should be on the pre and post deployment checklists. I also suggest printing out paper copies since I've sometimes needed more than two years worth of LES to help me to understand what has gone on.
     
  10. usna2012mom

    usna2012mom Member

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    LES - Leave and Earning Statement
     
  11. MJOmom

    MJOmom Member

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    wow ... yet another boatload of info and changes ... thank you! We can do a short course on quicken and turbo tax before he goes. We have both here ... Does either program come with the computers they are isssued?
     
  12. marvin7794

    marvin7794 Member

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    Just use the free turbotax online edition. Neither program comes on the issue computer.
     
  13. Profmom2

    Profmom2 Member

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    My mid got Quicken during Plebe fall as issue, and was used for financial training during plebe year.
     
  14. kamajama

    kamajama Member

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    Why do some of you have to be such smartasses? What happened to just being nice... thanks to all of you who aren't so rude. It is much appreciated.
     
  15. marvin7794

    marvin7794 Member

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    Here is a helpful link to the Defense Finance and Accounting Service. http://www.dfas.mil/index.html For Midshipman pay issues, best bet is for the pleber to go down to Midshipman Finance (on 4-0 as of a year ago) and inquire within. If your mid gets overpaid, tell them to save it. DOD has a bad habit of coming back and taking what they accidentally gave out early, or simply shorting you in the future. Either way, they don't overpay in the end. As for being a smartass, my apologies. I was unaware that message to Garcia had gone out of style. Respect.
     

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