Army taxes

If you like getting free stuff, you'd like being in the Army. Free health insurance, free travel (sort of), and free tax filing.

I got my taxes done this past week, and I came away very happy. I was so sure that my student loan repayment would cause me to owe about $500, but the Schedule M "making work pay" thing really helped me out.

Plus, the government withheld 28% of the "profits" from my two DITY moves, so it kind of balanced out. After everything was said and done, I'm actually due a refund -- a scarce pittance of a refund, to be sure -- but it's about $5oo above what I thought I'd get.

Army pay is a lot different than the civilian world. For one, there's no negotiating salary. You get what Congress gives you. (Luckily, they've been generous with the annual increases recently.)

Second, it's totally public. Anyone who wants to know what a second lieutenant makes can Google "base pay charts" and look under "O-1." It's no secret at all.

However, the base pay chart is a little deceptive -- base pay comprises only a plurality of the money I got this past year.


Here's how that breaks down:

• Taxable base pay was 38.5% of the total.
• SLRP (student loan repayment program), 23.1% I got one third of my student loans paid off at around my one-year anniversary. Two more payments of the same size will come at my two-year and three-year anniversaries. It's taxable, but there's no withholding -- potentially bad news for the unaware.
• DITY Move(do-it-yourself moves) compensation was 3.3%, and came from the Transportation Office because I moved my own stuff to and from BOLC III.

The above three categories are taxable, but together are less than two-thirds of the total. The following were nontaxable:

• TDY (temporary duty) 8.1% compensation was for the time I spent in Army schools. It wasn't as much as it could have been because I messed up with the certificate of non-availability, but it was certainly welcome.
• Other compensation, 1.3%, came from the uniform allowance and being on funeral details.
• FSH (family separation allowance) 1.7% was for being separated from my family during the months I was in schools.
• BAS (basic allowance for subsistence) 3.6% means money you get for food. For some reason, officers get $223 per month; enlisted joes get $294.
• BAH (basic allowance for housing) 16.7% is determined by rank and location. If you live in Hawaii, it's about two and a half times what you get for Fort Hood.
• Base to TSP 3.7% represents the amount of base pay that I contributed to the Thrift Savings Plan -- the government's version of a 401k, minus the matching contributions.

Hopefully, this illustrates just how deceptive base pay can be when comparing military and civilian pay.

It can also mislead the military guys who don't pay close attention to their finances. Though I made X this past year from a variety of sources, this coming year I'll only get only base pay, SLRP, BAH, BAS, and (hopefully) foreign language proficiency pay (FLPP).

And with that SLRP, I'll have to be a lot more careful on next year's taxes.