Paycheck Chronicles

Time To Do A Tax Checkup

Tax filing doesn't begin until January 2014, but there are things you should do today to make sure that next year's tax season doesn't bring any surprises.

Retirement Contributions

First, make sure you haven't accidentally exceeded any IRS limits on contributions to retirement plans.  The 2013 contribution limit for Individual Retirement Arrangements (IRAs) is  $5,500 ($6,500 if aged 50 or above.)  The 2013 contribution limit for Thrift Savings Plan (TSP) contributions is $17,500 (plus an additional $34,500 for tax exempt contributions made to a traditional IRA while in a combat zone.)  TSP also has a catch-up contribution limit, allowing those aged 50 or above to contribute an additional $5,500.

Go online, access your account, and add up all the contributions that you've made for 2013.  Then add any contributions still scheduled for the rest of the year.  If you find that you'll have contributed too much, discontinue any deductions for the rest of the year, and call your account holder to find out how to get a refund of any overage.

Tax Status

This is also a great time to look over your Leave and Earnings Statement (LES) to ensure that you have been properly credited for any time spent in a designated tax-exempt combat zone.  Fixing any errors before the end of the calendar year will mean that you won't have to wait for amended tax statements.  We had to file an amended return one year because we got a surprise amended W-2 well after filing, and it was really unnecessary work.

Flexible Spending Accounts

If you have a working spouse or a second job, you might have access to a flexible spending account.  Be sure to use all that money, as it is lost at the end of the year if you don't use it.  See if you can pre-pay for child care, stock up on drugstore items, and get new eyeglasses.  If you don't have access to a flexible spending account, drop a note to your Senator.  The Department of Defense was directed in 2009 to organize flexible spending accounts for military folks, and they still haven't done it.  It's such a little thing that could make a big difference to military families.

These tasks shouldn't take too long, unless you're locked out of your MyPay account, but they could go a long way in making the upcoming tax season easier.



Show Full Article

Related Topics

PayCheck Chronicles

Most Recent Military Pay Articles

View more
This block is broken or missing. You may be missing content or you might need to enable the original module.