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Military Transition Tax Considerations and Financial Planning Guide

Learn about tax advantages, FICA, federal and state taxes, marital status, VITA assistance, TSP tax issues, and asset distribution for military members transitioning to civilian life. Prepare with a solid transition plan, manage finances, and update legal documents regularly.

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Military Transition Tax Considerations and Financial Planning Guide

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  1. Module 1.6 Core PFRP For Transition

  2. Military Tax Issues • Tax Advantages • FICA (Social Security) • Federal taxes • State taxes • Withholding • Marital status • Exemptions Use VITA, www.irs.gov, state calculators 5.7

  3. Tax Considerations • No more auto extension • May need assistance for TSP tax issues • Important to factor state tax laws into salary considerations & budget • Separating veterans only have one year from separation to view/print myPay W-2 • Advantages of educational expenses

  4. Contact Installation Legal Office • Include several items: • Will • Trusts (as needed) • Power of Attorney (POA) • Medical directive or medical POA • Financial plan to care for survivors • Ensure information on designated beneficiaries is current and correct • Update every couple of years or when major life changes occur Determine distribution of assets during lifetime and at death

  5. Summary • Preparation is key • Develop a solid Individual Transition Plan • Use tools to manage your finances • Take advantage of available benefits • Use your resources before transition

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