Don’t Forget To Plan For Tax Repayment Starting This Month!

President Trump’s tax deferment executive order required Military members to defer a portion of their taxes between September 2020 and December 2020. Beginning January 2021 through April 2021, not only will you begin to have those taxes withheld again but you will also have to repay back the deferred taxes for the last four months. Many will see a decrease in their monthly paycheck of up to $1074 in January compared to December. This applies to those who recieved less than $8,666 monthly base pay.

If you followed our advice from back in September, then you should have placed that extra money in a savings account. You can now set up an automatic monthly transfer of 1/4 of that to your normal checking account through April 2021. This should make up for the repayment. If not, then you should really pay attention to your budget for the next four months.

The second round of stimulus checks are being paid out starting this week. Most will see a $600 deposit for every tax payer and dependent. You may need to set this money aside to make up for the tax repayment.

You can use our tax deferment calculator to estimate how much you need to repay.