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Money Matters after Reintegration Forward Where Do I Start? Evaluate “Where do I stand?” Anticipate “How will my pay adjust now that I am home?” Communicate “What are our Goals?” Budget “How can we get there?” Forward Back Evaluate Review all accounts and statements

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money matters after reintegration

Money Matters after Reintegration

Forward

Money Matters after Reintegration

where do i start
Where Do I Start?
  • Evaluate“Where do I stand?”
  • Anticipate

“How will my pay adjust now that I am home?”

  • Communicate

“What are our Goals?”

  • Budget

“How can we get there?”

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Money Matters after Reintegration

evaluate
Evaluate
  • Review all accounts and statements
    • Bank accounts (checking, etc.)
    • Savings
    • Investments
    • Retirement
    • Installment Loans (car, furniture, etc.)
    • Credit Cards
    • Other debt

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Money Matters after Reintegration

anticipate
Loss of Pay:

Income is now TAXED

HOSTILE FIRE PAY

HARDSHIP DUTY PAY

FAMILY SEPERATION ALLOWANCE (FSA)

Monthly Dollar Amount

- $100.00 - $400.00

(This amount varies per individual)

- $225.00

- $100.00

- $250.00

Anticipate

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Money Matters after Reintegration

communicate
Communicate
  • Communicate your GOALS to your spouse
    • Establish your Goals in writing
      • Short term (1 year or less; car or vacation)
      • Long term (1 year or more; home or retirement)
    • Avoid “surprises” later
    • Avoid Unmanageable Debt
    • Financial stress is #1 cause of marital problems!

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Money Matters after Reintegration

slide6

DREAM SHEET

  • Click here to print out the worksheet

Start by writing down your goal ideas for near‑term things you want to do, and then your longer‑term ideas. Your goals will change over the years, which is fine ‑ we all change. Think of this as a list for YOU to plan with, and your "future self” to check back with and see how you're doing.

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Money Matters after Reintegration

why budget
Why Budget?
  • Budget will help you meet your NEEDS
    • NEEDS first, not WANTS
      • Food
      • Shelter
      • Clothing
      • Transportation
      • Savings
    • WANTS are
      • Stereo
      • New car
      • Entertainment, etc.

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Money Matters after Reintegration

why budget continued
Why Budget Continued…
  • Prepare for Emergencies
  • Avoid financial harassment
  • Meet your Goals
  • Reduce financial stress
  • Protect family’s future
  • Protect your Career

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Money Matters after Reintegration

steps to successful budgeting
Steps to Successful Budgeting
  • Total Income
  • Total Expenses
  • Match Your Goals
  • Implementing the Budget Plan

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Money Matters after Reintegration

step 1 total income
Step 1: Total Income
  • Salary / Wages
    • Take home pay
    • Estimate your pay now after Reintegration
  • Other Sources
    • WIC
    • Child Support or alimony

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Money Matters after Reintegration

step 2 total expenses
Step 2: Total Expenses
  • Review past bills, receipts and canceled checks
  • Includes:
    • Food
    • Clothing
    • Phone
    • Insurance
    • Credit cards
    • Installment Loans
    • Alimony or child support, etc.

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Money Matters after Reintegration

step 3 match your goals and expenses with your income
Step 3: Match Your Goals and expenses with your income
  • Arrive at a reasonable dollar amount for spending limits and savings
  • If your Income isn’t large enough, need to make necessary adjustments.
    • Your Financial Readiness Program can help you.
      • Suggest ways to save you money
      • Work with Creditors on reducing the interest rate or proposing a new payment plan.

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Money Matters after Reintegration

slide13

Income and Expenses

  • Click here to print out the worksheet

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Money Matters after Reintegration

implement your budget
Implement your Budget
  • Be flexible
  • Be realistic
  • Involve the whole family
  • Use credit wisely
  • Shop carefully
  • Pay bills on time and be organized

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Money Matters after Reintegration

implementing continued
Implementing Continued…
  • Most importantly…
    • Remember to COMMUNICATE with your spouse on your goals
    • ConsistentlyMONITOR and revise
      • Set Dollar limits on spending
      • Give yourself an “Allowance”
      • Set weekly meetings to review budget

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Money Matters after Reintegration

slide16

CASH FLOW CALENDAR

  • MonthEstimated IncomeEstimated ExpensesSurplus/NegativeCumulative
  • Surplus/Negative
  • January ______________ ________________ ______________ ______________
  • February ______________ ________________ ______________ ______________
  • March ______________ ________________ ______________ ______________
  • April ______________ ________________ ______________ ______________
  • May ______________ ________________ ______________ ______________
  • June ______________ ________________ ______________ ______________
  • July ______________ ________________ ______________ ______________
  • August ______________ ________________ ______________ ______________
  • September ______________ ________________ ______________ ______________
  • October ______________ ______________________________ ______________
  • November ______________ ________________ ______________ ______________
  • December ______________ ________________ ______________ ______________
  • One excellent way to help you prepare for those high expense months is to use a simple cash‑flow calendar like this. You enter your estimated income and expenses for each month in the first two columns, then subtract to see whether you're going to go over your income. This will show you when expenses are expected to be higher, so you can anticipate them.
  • Click here for a printable version
  • In the right column you keep a running cumulative account of the surplus or negative amount. If it's negative, that is how much you'll need to take from your revolving savings. To make your revolving savings useful, it must start out with enough funds to keep you "above water" in those high expense months. You'll need to budget sufficient amounts for this account, which may mean rethinking your savings.

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Money Matters after Reintegration

remember
Remember,

All Soldiers will receive $3.50 per day while in Iraq. This will be paid at your home station upon return from deployment as part of your travel settlement.

  • One time occurrence, spend it wisely!
    • Pay off high interest debt (credit cards)
    • Build up a savings for emergencies

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Money Matters after Reintegration

2004 federal income tax
2004 Federal Income Tax
  • Soldiers have 180 days after redeployment to file federal income taxes.
    • Includes spouse and dependant children
    • Extension also goes for making a qualified IRA contribution

See Publication 3, Armed Forces Tax Guide, for more details.

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Money Matters after Reintegration

slide19

CHANGES TO TAX LAW FOR TAX YEAR 2004

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Money Matters after Reintegration

numbers to know
NUMBERS TO KNOW
  • EARNED INCOME CREDIT LIMITS:
    • $30,338 [$31,338 MFJ] -- 1 QUALIFYING CHILD
    • $34,458 [$35,458 MFJ] -- 2 OR MORE CHILDREN
    • $11,490 [$12,490 MFJ] -- NO QUALIFYING CHILD
  • MILEAGE ALLOWANCE:
    • BUSINESS 37.5 CENTS/MILE
    • CHARITABLE 14CENTS/MILE
    • MEDICAL 14 CENTS/MILE
    • MOVING 14 CENTS/MILE

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Money Matters after Reintegration

tax credits
TAX CREDITS
  • CHILD & DEPENDENT CARE CREDIT
  • FOREIGN TAX CREDIT
  • EARNED INCOME CREDIT
  • CHILD TAX CREDIT
  • ADDITIONAL CHILD TAX CREDIT
  • ADOPTION CREDIT
  • HOPE SCHOLARSHIP CREDIT
  • LIFETIME LEARNING CREDIT
  • RETIREMENT SAVINGS CONTRIBUTIONS CREDIT

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Money Matters after Reintegration

earned income credit
EARNED INCOME CREDIT
  • CHANGED IN TY 2002!
  • NO LONGER REQUIRED TO ADD NONTAXABLE INCOME TO AGI
  • A LOT MORE MILITARY TAXPAYERS QUALIFY
  • CAN BE AS MUCH AS $4,300!
  • CIVILIANS OVERSEAS DO NOT QUALIFY FOR “EIC”

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Money Matters after Reintegration

earned income credit23
EARNED INCOME CREDIT
  • BIG CHANGE FOR 2004!
  • MILITARY TAXPAYERS CAN ELECT TO HAVE THEIR NONTAXABLE COMBAT PAY INCLUDED IN “EARNED INCOME” FOR PURPOSES OF QUALIFYING FOR THE EIC

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Money Matters after Reintegration

child tax credit
CHILD TAX CREDIT
  • BIG MONEYMAKER FOR MILITARY
  • $1,000 FOR 2004!
  • EASY TO OVERLOOK
  • NEED TO ADJUST WITHHOLDING TO AVOID OVERWITHHOLDING

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Money Matters after Reintegration

lifetime learning credit
LIFETIME LEARNING CREDIT
  • AMOUNT OF TUITION & RELATED EXPENSES INCREASED IN 2003 FROM $5,000/YEAR TO $10,000/YEAR
  • MAXIMUM AMOUNT OF THE CREDIT INCREASED IS $2,000/YEAR
  • AMOUNTS PAID BY THE ARMY FOR SOLDIERS’ EDUCATION DO NOT QUALIFY FOR EDUCATION CREDITS

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Money Matters after Reintegration

ira contribution limits
IRA CONTRIBUTION LIMITS
  • THE MAXIMUM CONTRIBUTION TO A TRADITIONAL OR ROTH IRA IN 2005 INCREASED TO $4,000
  • IF YOU ARE OVER 50, THE LIMIT INCREASED

TO $4,500

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Money Matters after Reintegration

slide27

MILITARY FAMILY TAX RELIEF ACT OF 2003 (MFTRA)

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Money Matters after Reintegration

capital gains on home sales
CAPITAL GAINS ON HOME SALES
  • OWNERSHIP TEST:
    • MUST HAVE OWNED HOME FOR 2 OF THE 5 YEARS LEADING UP TO SALE
  • USE TEST:
    • MUST HAVE LIVED IN HOME FOR 2 OF THE 5 YEARS LEADING UP TO SALE
  • MFTRA HELPED MILITARY TAXPAYERS MEET USE TEST…

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Money Matters after Reintegration

slide29

COMBAT ZONE TAX INFO

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Money Matters after Reintegration

combat zone basic vocabulary
COMBAT ZONE BASIC VOCABULARY
  • “COMBAT ZONE”
  • “QUALIFIED HAZARDOUS DUTY AREA”
  • “EXCLUSION”
  • “EXTENSION”
  • CONSULT PUB 3

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Money Matters after Reintegration

combat zones
COMBAT ZONES
  • CREATED BY EXECUTIVE ORDER
  • OPERATION ENDURING FREEDOM COMBAT ZONE:
    • AFGHANISTAN & AIR SPACE ABOVE IT
    • ALSO TROOPS IN DIRECT SUPPORT & RECEIVING HOSTILE FIRE OR IMMINENT DANGER PAY SERVING IN:
      • UZBEKISTAN, KYRGYSTAN, PAKISTAN, TAJIKISTAN, & JORDAN
      • YEMEN, THE PHILIPPINES, & DJIBOUTI.

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Money Matters after Reintegration

combat zones32
COMBAT ZONES
  • PERSIAN GULF AREA
    • IRAQ, KUWAIT, OMAN, BAHRAIN, QATAR, U.A.E., SAUDI ARABIA, & ADJACENT WATERS
    • TURKEY, IF IN DIRECT SUPPORT OF “OIF”
  • KOSOVO AREA
    • KOSOVO, SERBIA, & ALBANIA (PLUS ADRIATIC & NORTH IONIAN SEA)

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Money Matters after Reintegration

qualified hazardous duty areas
QUALIFIED HAZARDOUS DUTY AREAS
  • CREATED BY CONGRESS
  • FORMER YUGOSLAVIA
    • BOSNIA, CROATIA, MACEDONIA
  • ALLIED FORCE
    • KOSOVO, SERBIA, ALBANIA (PLUS ADRIATIC & NORTH IONIAN SEA)
  • INCLUDES THOSE IN DIRECT SUPPORT OF OPERATIONS IN QHDA

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Money Matters after Reintegration

exclusion
EXCLUSION
  • MEANS YOU DON’T HAVE TO PAY TAX ON MILITARY PAY YOU RECEIVE IN CZ OR QHDA
  • APPLIES TO MILITARY ONLY
  • ENLISTED & WARRANT OFFICERS
    • ALL MILPAY EXCLUDED
  • COMMISSIONED OFFICERS
    • ANY MILPAY OVER EXCLUDABLE AMOUNT ($6,315.90/MO.) TAXABLE

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Money Matters after Reintegration

exclusion35
EXCLUSION
  • FOR “EACH MONTH OR PART OF A MONTH” SERVED IN CZ OR QHDA
  • APPLIES TO STUDENT LOAN REIMBURSEMENTS & BONUSES WHICH THE SOLDIER BECAME ENTITLED TO WHILE SERVING IN CZ OR QHDA

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Money Matters after Reintegration

exclusion36
EXCLUSION
  • WHAT ABOUT PAYMENTS FOR LEAVE ACCRUED IN COMBAT ZONE?
  • WHAT ABOUT TSP CONTRIBUTIONS?
  • WHAT ABOUT IRA CONTRIBUTIONS?

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Money Matters after Reintegration

extension
EXTENSION
  • MEANS YOU HAVE MORE TIME TO FILE TAX RETURNS AND TAKE CARE OF OTHER TAX MATTERS
  • APPLIES TO MILITARY AND SOME CIVILIANS IN CZ OR QHDA
  • ALSO APPLIES TO THOSE IN DIRECT SUPPORT OF OPERATIONS IN CZ OR QHDA

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Money Matters after Reintegration

extension38
EXTENSION
  • 180 DAYS FROM DATE SOLDIER REDEPLOYS, PLUS # OF DAYS SOLDIER HAD LEFT TO FILE WHEN (S)HE DEPLOYED
  • IF SPONSOR HAS EXTENSION, SO DOES THE SPOUSE!

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Money Matters after Reintegration

useful websites
Useful websites:
  • www.irs.gov
  • www.mypay.dfas/mil/mypay.aspx
    • 2004 W2’s are available December 27, 2004

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Money Matters after Reintegration

do you need an advisor
Do you need an advisor?

Counseling is available, Army Community Service (ACS), Building #7029, Room 117. Call 469-8487 for appointment

We also have the following classes available:

Financial Readiness and Management

Home Buying

Car Buying

Investments

Checkbook

and many more.

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Money Matters after Reintegration

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