Are other reservists surprised by a small tax refund?

SSgt Private RallyPoint Member — Fri, 13 Feb 2015 10:16:12 -0500

This kind of question is geared towards my guard and reserve counterparts with civilian jobs who do the minimum 1 weekend a month/2 weeks a year:

So this is my first year filing taxes that include my pay from the military. Last year I made a nice chuck from my refund for just my civilian job.

This year I started earning Drill Pay in January so I had one full year with the military. However I was not at my civilian job for 6 months because I was on active duty orders for training.

As I'm entering my W-2s over and over again, my refund is definitely not what I expected it to be. If I only entered my civilian W-2, I'd be satisfied with my total refund.

Does anyone else get a small refund working as a reservist?

Response by LTC Private RallyPoint Member made Feb 13 at 2015 10:21 AM

LTC Private RallyPoint Member — Fri, 13 Feb 2015 10:21:27 -0500

SSgt Private RallyPoint Member for me when I was a reservist I had small amounts, but that was also because I was making next to nothing through the year as I was substituting. When I got a full-time teaching job it was bigger, but not huge. Many people think that their return should be huge, but it really depends on how much you are taking out. What are you claiming on W-4. My Dad is a tax accountant and tries to hit 0-0-0 where he does not owe or receive money for federal, state, or local. He did it last year or the year before.

The question is do you want your money now and risk owing money later or give money now and get it back later. Do you trust yourself with more money? Do you want to give up interest on the money that you could have now and pay later?

Response by LTC Yinon Weiss made Feb 13 at 2015 10:37 AM

LTC Yinon Weiss — Fri, 13 Feb 2015 10:37:43 -0500

A small tax refund just means that you didn't pay too much in taxes during the year. You can always try to overpay your taxes and get a bigger refund later, but I would personally just keep my money throughout the year.

The difference between your civilian refund and military refund may be that you are overpaying your taxes with your civilian employer. You should double check how many deductions you are claiming on your W-4 with your civilian employer. You may be able to lower the deductions and keep more of your monthly civilian monthly pay check.

Response by SSG Private RallyPoint Member made Feb 13 at 2015 10:53 AM

SSG Private RallyPoint Member — Fri, 13 Feb 2015 10:53:08 -0500

When you were on orders you were probably drawing BAH and BAS, which are tax exempt. You have only been in a year or two so in your base pay alone, not many taxes are taken out of that. As you progress in your career you will get more.

Response by SPC Private RallyPoint Member made Feb 13 at 2015 10:57 AM

SPC Private RallyPoint Member — Fri, 13 Feb 2015 10:57:14 -0500

I owe taxes this year after paying over 9000 in taxes. Which is ridiculous. I'm making a little less than 30k.

Response by 2LT Private RallyPoint Member made Feb 13 at 2015 10:58 AM

2LT Private RallyPoint Member — Fri, 13 Feb 2015 10:58:20 -0500

Your refund depends on how much you pay based on your income. I am married with 2 kids and have taxes withheld as if I was single. That way I have a large return that goes into kids college fund. Some people claim that if you have a very small refund or no refund your withholding is perfect and your getting the right amount each paycheck. It all depends if you want the money each paycheck, or once a year.

Response by 1SG Private RallyPoint Member made Feb 13 at 2015 11:18 AM

1SG Private RallyPoint Member — Fri, 13 Feb 2015 11:18:10 -0500

A small tax refund is not a bad thing.

Think about what that refund is - it is the money you overpaid the government over the course of the year. Basically, you are giving Uncle Sam an interest-free loan. Uncle Sam thanks you for your charity.

I for one want to play it as close as possible. Typically, I try to pay in at the end of the year, withholding just enough to avoid a tax penalty.

Don't worry, the US Government will get theirs.