U.S. Tax Code adds just another layer of complexity for a deploying Reservist, and his or her family.
The average American, including some in leadership positions, have no detailed understanding of what complexites Warrior Citizens and their families face in their daily lives. Detailed here is just one more requirement adding to the strain placed on activated and deploying Citizen Soldiers and their families. A strain, which Active Component soldiers, in the Active Component Army, do not have to deal with. Because they must have a civilian job, employed Reservist's, every time they deploy, are thrown right into the complexities of our U.S. IncomeTax code!
Revealed here by our Army Reserve Association tax advisor, is just one more specific complexity, of many, which tens-of-thousands of our USAR soldiers and families must face amisdt all the other anxieties of these extended wars.
The following questions and answers have been extracted from the Internal Revenues
Q & A section for military personnel on their website: www.irs.gov and are quite revealing.
EXTRACT ----------------------------------
Q-39: If an employee (Reservist) is called to active duty and receives military differential pay (from his civilian employer), how are these payments reported by the (Reservist's civilian) employer to the employee (Reservist)?
A-39: (Civilian) Employers should report military differential pay on Form 1099-MISC, Box 3: Other Income. Do not use Form W-2 for these payments. (Civilian) Employers should not withhold FICA or income tax from these payments and the payments are not subject to FUTA taxes.
Q-40: How does a person (Reservist) who receives military differential pay report this on the (their) federal income tax return?
A-40: The recipient (Reservist) reports the Form 1099-MISC amount on (thier income tax return) Line 21 of Form 1040 (Other Income) and lists the type as Military Differential Pay (which their civilian employer paid them). No self-employment tax is due (from the Reservist) because the income from these payments (from his civilian employer) is not derived from any trade or business conducted by the taxpayer (Reservist) for self-employment tax purposes.
Q-41: Since these payments (from his civilian employer) are considered income (to the Reservist) but not “wages” subject to withholding, what should persons (our Reservist) receiving these payments do to avoid owing large amounts of tax when they file their (tax) returns?
A-41: Since the (civilian) employer is not required to withhold income tax (for the Reservist), the recipient (Reservist) should prepare for the tax liability by making quarterly estimated tax payments. (We must assume, from the combat zone, or by his family who acts for him with a power of attorney.)
One option (the IRS tells us) is for the taxpayer (Reservist) to sign up for the Electronic Federal Tax Payment System (EFTPS), which enables the person (Reservist) to schedule payments directly from a bank account for up to a year in advance. (But not 15 months?) This is a preferred method (the IRS continues), since it is easiest for both the taxpayer (Reservist) and the (U.S.) government (i.e., the Internal Revenue Service) and ensures prompt and accurate crediting of payments to the taxpayer's (Reservist's) account.
Other options are to make credit card payments or send checks with Form 1040-ES vouchers (from, we assume. wherever in the world our Warrior Citizen may be deployed). Get more information on electronic payment methods or see IRS Publication 505, Tax Withholding and Estimated Tax (PDF 402K). (we are told.)
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Editors Note: The inserted words (Reservist), etc., and the inserted words (civilian) in front of employer, etc., have been added to provide a clearer understand of just how this tax code impacts a Reservist - our Warrior Citizen.
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A Reserve family can't live on Post like the Army's Active Component!
Except for Regular Army, Active Component (AC) Recruiters, and those few Active component soldiers assigned to USAR units or to other unique duties, the Army takes care of all the AC Army Soldiers' family housing needs - "On Post", or in the immediate area, even when deployed. That's as it should be!
But, that's not the case for the Citizen Soldier and the Reservist's family! They endure separation from the "Getgo."
Except for some Reservist's in the AGR (Active Guard Reserve) program - who are on extended active duty - and just happened to be assigned to duties on an Active Component installation, AGR's and the typical "Drilling Reservists" who are assigned to USAR units, and those Reservists who are assigned to the IRR (Individual Ready Reserve) or IMA (Individual Mobilization Augmentee) programs, are not assigned, and do not get "On Post" housing.
"As a consequence Citizen Soldiers -Warriors Citizens - Reservists - AGR's - or non-Active Component soldiers, by whatever name we use to refer to them, are not assigned "Post" housing!
This places a severe added burden on the Reservist's and their families the AC soldier simply does not have to deal with!", states Col. George M. "Mike" Lind, Army of the United States, Retired.
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