By now you probably have heard that the military will not have their social security-FICA taxes withheld for the rest of 2020. While you may have heard about it, you may not know what to do about it.
To get everyone up to speed quickly, I’ve invited Kate Horrell from KateHorrell.com and Daniel Kopp from Wise Stewardship Financial Planning to break down what the tax deferral is and how you can best manage the money for your current situation.
It’s always fun to have Daniel and Kate on the show. Because we’re friends I decided to put that friendship to the test in Game Time. Listen to hear who knows me best, Daniel or Kate.
The Military Money Show is sponsored by Charles Schwab. Since 1973, Charles Schwab has been helping people achieve better financial outcomes for themselves and their families. You can learn more about Charles Schwab and the work they do at Schwab.com.
Payroll Tax Deferral Money Episode Details
What the payroll tax deferral is
The percentage of the money you’ll have extra each month
How the military payroll tax deferral relates to the CARES Act
Why the military should care about the tax deferral
The impacts of it in 2021 (it’s a deferral, not forgiveness)
What you should do with the additional money
Where to get professional financial help
The answer to if you can increase your “withholdings”
What happens when you leave the military
What happens if you get promoted
How a pay raise can impact the tax deferral repayment