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Money Matters after Reintegration
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Where Do I Start?

• Evaluate Where do I stand?
• Anticipate
• How will my pay adjust now that I am home?
• Communicate
• What are our Goals?
• Budget
• How can we get there?

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Evaluate

• Review all accounts and statements
• Bank accounts (checking, etc.)
• Savings
• Investments
• Retirement
• Installment Loans (car, furniture, etc.)
• Credit Cards
• Other debt

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Anticipate

• Loss of Pay
• Income is now TAXED
• HOSTILE FIRE PAY
• HARDSHIP DUTY PAY
• FAMILY SEPERATION ALLOWANCE (FSA)

• Monthly Dollar Amount
• - 100.00 - 400.00
• (This amount varies per individual)
• - 225.00
• - 100.00
• - 250.00

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Communicate

• Communicate your GOALS to your spouse
• Establish your Goals in writing
• Short term (1 year or less car or vacation)
• Long term (1 year or more home or retirement)
• Avoid surprises later
• Avoid Unmanageable Debt
• Financial stress is 1 cause of marital problems!

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DREAM SHEET

• Click here to print out the worksheet

Start by writing down your goal ideas for
near-term things you want to do, and then your
longer-term ideas. Your goals will change over
the years, which is fine - we all change. Think
of this as a list for YOU to plan with, and your
"future self to check back with and see how
you're doing.
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Why Budget?

• Budget will help you meet your NEEDS
• NEEDS first, not WANTS
• Food
• Shelter
• Clothing
• Transportation
• Savings
• WANTS are
• Stereo
• New car
• Entertainment, etc.

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Why Budget Continued

• Prepare for Emergencies
• Avoid financial harassment
• Meet your Goals
• Reduce financial stress
• Protect familys future
• Protect your Career

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Steps to Successful Budgeting

• Total Income
• Total Expenses
• Match Your Goals
• Implementing the Budget Plan

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Step 1 Total Income

• Salary / Wages
• Take home pay
• Estimate your pay now after Reintegration
• Other Sources
• WIC
• Child Support or alimony

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Step 2 Total Expenses

• Review past bills, receipts and canceled checks
• Includes
• Food
• Clothing
• Phone
• Insurance
• Credit cards
• Installment Loans
• Alimony or child support, etc.

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Step 3 Match Your Goals and expenses with your
income

• Arrive at a reasonable dollar amount for spending
  limits and savings
• If your Income isnt large enough, need to make
  necessary adjustments.
• Your Financial Readiness Program can help you.
• Suggest ways to save you money
• Work with Creditors on reducing the interest rate
  or proposing a new payment plan.

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Income and Expenses

• Click here to print out the worksheet

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Implement your Budget

• Be flexible
• Be realistic
• Involve the whole family
• Use credit wisely
• Shop carefully
• Pay bills on time and be organized

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Implementing Continued

• Most importantly
• Remember to COMMUNICATE with your spouse on your
  goals
• Consistently MONITOR and revise
• Set Dollar limits on spending
• Give yourself an Allowance
• Set weekly meetings to review budget

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• CASH FLOW CALENDAR
• Month Estimated Income Estimated
  Expenses Surplus/Negative
  Cumulative
• 
  Surplus/Negative
• January ______________
  ________________ ______________
  ______________
• February ______________
  ________________ ______________
  ______________
• March ______________ ________________
  ______________ ______________
• April ______________ ________________
  ______________ ______________
• May ______________ ________________
  ______________ ______________
• June ______________ ________________
  ______________ ______________
• July ______________ ________________
  ______________ ______________
• August ______________ ________________
  ______________ ______________
• September ______________
  ________________ ______________
  ______________
• October ______________
  ________________ ______________
  ______________
• November ______________
  ________________ ______________
  ______________
• December ______________
  ________________ ______________
  ______________

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Remember,

• All Soldiers will receive 3.50 per day while in
  Iraq. This will be paid at your home station
  upon return from deployment as part of your
  travel settlement.
• One time occurrence, spend it wisely!
• Pay off high interest debt (credit cards)
• Build up a savings for emergencies

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2004 Federal Income Tax

• Soldiers have 180 days after redeployment to file
  federal income taxes.
• Includes spouse and dependant children
• Extension also goes for making a qualified IRA
  contribution
• See Publication 3, Armed Forces Tax Guide, for
  more details.

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CHANGES TO TAX LAW FOR TAX YEAR 2004
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NUMBERS TO KNOW

• EARNED INCOME CREDIT LIMITS
• 30,338 31,338 MFJ -- 1 QUALIFYING CHILD
• 34,458 35,458 MFJ -- 2 OR MORE CHILDREN
• 11,490 12,490 MFJ -- NO QUALIFYING CHILD
• MILEAGE ALLOWANCE
• BUSINESS 37.5 CENTS/MILE
• CHARITABLE 14 CENTS/MILE
• MEDICAL 14 CENTS/MILE
• MOVING 14 CENTS/MILE

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TAX CREDITS

• CHILD DEPENDENT CARE CREDIT
• FOREIGN TAX CREDIT
• EARNED INCOME CREDIT
• CHILD TAX CREDIT
• ADDITIONAL CHILD TAX CREDIT
• ADOPTION CREDIT
• HOPE SCHOLARSHIP CREDIT
• LIFETIME LEARNING CREDIT
• RETIREMENT SAVINGS CONTRIBUTIONS CREDIT

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EARNED INCOME CREDIT

• CHANGED IN TY 2002!
• NO LONGER REQUIRED TO ADD NONTAXABLE INCOME TO
  AGI
• A LOT MORE MILITARY TAXPAYERS QUALIFY
• CAN BE AS MUCH AS 4,300!
• CIVILIANS OVERSEAS DO NOT QUALIFY FOR EIC

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EARNED INCOME CREDIT

• BIG CHANGE FOR 2004!
• MILITARY TAXPAYERS CAN ELECT TO HAVE THEIR
  NONTAXABLE COMBAT PAY INCLUDED IN EARNED INCOME
  FOR PURPOSES OF QUALIFYING FOR THE EIC

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CHILD TAX CREDIT

• BIG MONEYMAKER FOR MILITARY
• 1,000 FOR 2004!
• EASY TO OVERLOOK
• NEED TO ADJUST WITHHOLDING TO AVOID
  OVERWITHHOLDING

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LIFETIME LEARNING CREDIT

• AMOUNT OF TUITION RELATED EXPENSES INCREASED IN
  2003 FROM 5,000/YEAR TO 10,000/YEAR
• MAXIMUM AMOUNT OF THE CREDIT INCREASED IS
  2,000/YEAR
• AMOUNTS PAID BY THE ARMY FOR SOLDIERS EDUCATION
  DO NOT QUALIFY FOR EDUCATION CREDITS

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IRA CONTRIBUTION LIMITS

• THE MAXIMUM CONTRIBUTION TO A TRADITIONAL OR
  ROTH IRA IN 2005 INCREASED TO 4,000
• IF YOU ARE OVER 50,
  THE LIMIT INCREASED
• TO 4,500

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MILITARY FAMILY TAX RELIEF ACT OF 2003
(MFTRA)
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CAPITAL GAINS ON HOME SALES

• OWNERSHIP TEST
• MUST HAVE OWNED HOME FOR 2 OF THE 5 YEARS LEADING
  UP TO SALE
• USE TEST
• MUST HAVE LIVED IN HOME FOR 2 OF THE 5 YEARS
  LEADING UP TO SALE
• MFTRA HELPED MILITARY TAXPAYERS MEET USE TEST

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COMBAT ZONE TAX INFO
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COMBAT ZONE BASIC VOCABULARY

• COMBAT ZONE
• QUALIFIED HAZARDOUS DUTY AREA
• EXCLUSION
• EXTENSION
• CONSULT PUB 3

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COMBAT ZONES

• CREATED BY EXECUTIVE ORDER
• OPERATION ENDURING FREEDOM COMBAT ZONE
• AFGHANISTAN AIR SPACE ABOVE IT
• ALSO TROOPS IN DIRECT SUPPORT RECEIVING HOSTILE
  FIRE OR IMMINENT DANGER PAY SERVING IN
• UZBEKISTAN, KYRGYSTAN, PAKISTAN, TAJIKISTAN,
  JORDAN
• YEMEN, THE PHILIPPINES, DJIBOUTI.

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COMBAT ZONES

• PERSIAN GULF AREA
• IRAQ, KUWAIT, OMAN, BAHRAIN, QATAR, U.A.E., SAUDI
  ARABIA, ADJACENT WATERS
• TURKEY, IF IN DIRECT SUPPORT OF OIF
• KOSOVO AREA
• KOSOVO, SERBIA, ALBANIA (PLUS ADRIATIC NORTH
  IONIAN SEA)

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QUALIFIED HAZARDOUS DUTY AREAS

• CREATED BY CONGRESS
• FORMER YUGOSLAVIA
• BOSNIA, CROATIA, MACEDONIA
• ALLIED FORCE
• KOSOVO, SERBIA, ALBANIA (PLUS ADRIATIC NORTH
  IONIAN SEA)
• INCLUDES THOSE IN DIRECT SUPPORT OF OPERATIONS IN
  QHDA

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EXCLUSION

• MEANS YOU DONT HAVE TO PAY TAX ON MILITARY PAY
  YOU RECEIVE IN CZ OR QHDA
• APPLIES TO MILITARY ONLY
• ENLISTED WARRANT OFFICERS
• ALL MILPAY EXCLUDED
• COMMISSIONED OFFICERS
• ANY MILPAY OVER EXCLUDABLE AMOUNT (6,315.90/MO.)
  TAXABLE

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EXCLUSION

• FOR EACH MONTH OR PART OF A MONTH SERVED IN CZ
  OR QHDA
• APPLIES TO STUDENT LOAN REIMBURSEMENTS BONUSES
  WHICH THE SOLDIER BECAME ENTITLED TO WHILE
  SERVING IN CZ
  OR QHDA

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EXCLUSION

• WHAT ABOUT PAYMENTS FOR LEAVE ACCRUED IN COMBAT
  ZONE?
• WHAT ABOUT TSP CONTRIBUTIONS?
• WHAT ABOUT IRA CONTRIBUTIONS?

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EXTENSION

• MEANS YOU HAVE MORE TIME TO FILE TAX RETURNS AND
  TAKE CARE OF OTHER TAX MATTERS
• APPLIES TO MILITARY AND SOME CIVILIANS IN CZ OR
  QHDA
• ALSO APPLIES TO THOSE IN DIRECT SUPPORT OF
  OPERATIONS IN CZ OR QHDA

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EXTENSION

• 180 DAYS FROM DATE SOLDIER REDEPLOYS, PLUS OF
  DAYS SOLDIER HAD LEFT TO FILE WHEN (S)HE DEPLOYED
• IF SPONSOR HAS EXTENSION, SO DOES THE SPOUSE!

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Useful websites

• www.irs.gov
• www.mypay.dfas/mil/mypay.aspx
• 2004 W2s are available December 27, 2004

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Do you need an advisor?

• Counseling is available, Army Community Service
  (ACS), Building 7029, Room 117. Call 469-8487
  for appointment
• We also have the following classes available
• Financial Readiness and Management
• Home Buying
• Car Buying
• Investments
• Checkbook
• and many more.

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