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Thread: Taxes and PCS and Bonuses and confusion...

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    #1

    Taxes and PCS and Bonuses and confusion...

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    Ok, so I asked about this last year but I am still kind of confused.

    We PCSed in September of 2011 but due to some cluster we didn't get paid for our partial PPM until Feb 2012. So nothing for the move went on our taxes last year. This year I am assuming that we will get a w2 for it. How do we deal with that on our taxes? Is there software that can handle it or should we go to someone? Also, does it count as income? We are this close to not qualifying for the EIC and I think that will put us over. Super lame to miss out on $3000 because we got paid late (we definitely didn't qualify last year so it wouldn't have mattered.) Is it reported as the full amount and then you deduct the expenses or will it just show our "profit?" I am assuming we won't get the EIC as much as that sucks.

    Next question is his bonus, which was also paid late. He received it in 2012 as well. Will there be a seperate w2 for that or will it be on his regular one? I am assuming it will just be added to his income but not sure.

    I have always done our taxes myself, but I think I may have someone do them this year.

    TIA!
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    Your reimbursement for PPM will not go on a W2 and you cannot claim it on taxes, because it was reimbursed. Only monies that were not reimbursed can go on taxes. Reimbursement are also allowances (such as DLA, TLE, etc) and those are not taxable. As mentioned, you can claim non-reimbursed items as a deduction, but none of it is income.

    As far as the bonus, it will come on his W2 as part of his income. So if his annual base pay is say $20K and his bonus was say $10K, his W2 will show his annual income as $30K. (if you look at the LES in which he received the bonus you will see it listed as income).

    So, if you haven't accounted for his bonus as part of your income, it could put you over the income limit for EIC and disqualify you.

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    I thought the profit from the PPM would be reported as income on a travel w2 and we would have to report that?

    So his bonus should already be reflected in his YTD pay? That's good news!

    I have been playing with tax refund estimators (which I know aren't the best tool) to try and get an idea of our refund since we are planning on paying for our recent trip home with it. We charged everything while we were out there and I want to make sure our refund will cover it. I have no patience
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    I have never reported PPM reimbursement as income.. because it isn't. Its an allowance, and a repayment of funds used. It isn't an income. Just like BAH and BAS aren't taxable, neither is PPM. If it were, then everyone who PCS's would be required to report their allowance as income, because many people (even those who don't PPM) make lots of money and 'pocket' it.

    PPM is basically the DLA, TLE, per diem, and MALT all allowances... DLA, TLE/TLA, and per diem you get regardless if it is PPM or not, MALT would be the only difference because that's for a POV.


    And yes, his bonus should've been reflected in his YTD.

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    Sweet! That makes it a lot less confusing. I swear just the letters PCS make me dumb I had heard that the profit was taxable, but you hear a lot of things! Thank you so much for your help!
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    Quote Originally Posted by maegan View Post
    Sweet! That makes it a lot less confusing. I swear just the letters PCS make me dumb I had heard that the profit was taxable, but you hear a lot of things! Thank you so much for your help!
    Some say it is, but it isn't.

    Here is the IRS exerpt.. read bottom of page 7 (Moving Expenses) and page 8. http://www.irs.gov/pub/irs-pdf/p3.pdf

    It clearly states that only monies received that were not part of entitled allowances need to be reported. The parts of the reimbursement that are taxable are those amounts in which were excess of what you spent, those are the MALT and per diem. per diem is for food and lodging, MALT is for driving the car. So, if Per Diem was $50 a day and you spent only $10, then you are in excess $40 per day. For the car, if you spent say $200 in gas, but your MALT reimbursement was only $50, you are in negative. Thus, it evens out to where you are not in excess because the overage of the per diem would cover the underpayment of the MALT.

    You would have to nickel and dime yourself to determine how much exactly was in excess. To do that you have to first know how much you got for DLA and TLA/TLE and subtract that from your payment recieved. From the remainder you would then have to go through all receipts to see what you paid for hotel, food and gas and subtract that.. the remainder (if any) is what your income would be.

    So, if you got a $3000 check for PPM. DLA = $1500, TLA/TLE = $500, remainder = $1500. From that $1500 we now have to subtract hotel/food/gas... hotel = $500, food = $200, gas = $500, remainder = $200... the $200 is what you then report as income.

    Most don't even bother going through that because it isn't necessary.

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    Awesome! Thank you so much!
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    the profit from a PPM IS taxable- and you will get a W2- last year they were sent on line to be printed.

    you were taxed at a rate of 25-28% based on your total income.

    you cannot claim anything on the PPM profit because when finance did the deductions they deducted all the receipts came to a total that was considered profit and taxed that.

    so for instance: your PPM payment was 2,000 dollars, you had receipts and expenses totally 500 dollars, your total profit was 1500 your taxable amount is 1500 your tax rate is 25% = 375 dollars paid for taxes.
    you will get a W2 for 375.00.

    for the bonus it will be on the reg W2- also remember this will count towards your total annual income also.
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    Quote Originally Posted by TrishAFSpouse View Post
    Some say it is, but it isn't.

    Here is the IRS exerpt.. read bottom of page 7 (Moving Expenses) and page 8. http://www.irs.gov/pub/irs-pdf/p3.pdf

    It clearly states that only monies received that were not part of entitled allowances need to be reported. The parts of the reimbursement that are taxable are those amounts in which were excess of what you spent, those are the MALT and per diem. per diem is for food and lodging, MALT is for driving the car. So, if Per Diem was $50 a day and you spent only $10, then you are in excess $40 per day. For the car, if you spent say $200 in gas, but your MALT reimbursement was only $50, you are in negative. Thus, it evens out to where you are not in excess because the overage of the per diem would cover the underpayment of the MALT.

    You would have to nickel and dime yourself to determine how much exactly was in excess. To do that you have to first know how much you got for DLA and TLA/TLE and subtract that from your payment recieved. From the remainder you would then have to go through all receipts to see what you paid for hotel, food and gas and subtract that.. the remainder (if any) is what your income would be.

    So, if you got a $3000 check for PPM. DLA = $1500, TLA/TLE = $500, remainder = $1500. From that $1500 we now have to subtract hotel/food/gas... hotel = $500, food = $200, gas = $500, remainder = $200... the $200 is what you then report as income.

    Most don't even bother going through that because it isn't necessary.
    actually Per diem, MALT and DLA are all non-table ALLOWANCES and do not count towards this.

    what this actually means is if your trying to claim moving expenses, you would have to show where you paid in excess of the allowances-
    so say you are trying to prove that you spent 2,000 dollars out of pocket for the enroute travel: your per Diem, MALT, DLA and TLE totalled 5,000 dollars; you would have to show where the excess 2,000 dollars was spent.

    trish is right that you would have to keep every receipt and very accurate records. BUT PCS allowances are NEVER taxed
    most people cannot do this because of the high amounts of allowances
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    Ah, gotcha. So there will be income to be reported for whatever our profit was (which was pretty minimal, a couple hundred dollars if I remember correctly) but nothing to deduct for expenses because that has already been deducted by finance/reimbursed by allowances. It will be on mypay as a travel w2, right?

    You guys are amazing. I don't know how we would have navigated all of this if it weren't for this site!
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