Big Income Tax Changes!

Have you filed your 2018 Federal tax return? Did you find that your refund is lower than last year? Do you owe more than you had withheld? The major tax changes made last year have really affected the withholding formula. Because of that your retirement check and your social security payment probably increased and less was withheld. You can make sure this does not happen to you for your 2019 tax filing, here’s how:

1. Collect your 2018 return paper work (include all statements for investments and bank accounts)

2. Get online (if you don’t have access to a computer at home try the public library)

3. Go to https://www.irs.gov/individuals/irs-withholding-calculator

4. On the upper right of the page you can view a video on how to use the calculator

5. When you are done, you can adjust your W-4 on the DFAS website: https://mypay.dfas.mil/mypay.aspx

6. If you aren’t familiar with this page there are video instructions available by going to https://bit.ly/2AgEJf1

7. Still need help? Your kids or grandchildren are great tech help resources.

Major Veterans Legislation Winding Through Congress

Among this Legislation is a measure that would block schools from penalizing student veterans for Department of Veteran Affairs delays. This was brought about by the public relations fiasco caused by VA’s late GI Bill payments this last fall.

Other items include burial and memorial benefits, expansions of the Service members Civil Relief Act (SCRA) and changes to VA’s debt collection practices.

2019 COLA (Cost of Living Adjustment)

I hope you noticed an increase to your retirement check in January. The 2019 COLA (cost of living adjustment) for military retired pay, Survivor Benefit Plan annuities, Social Security checks, VA disability and survivor benefits is 2.8 percent. MOAA accurately forecast this final outcome in November based on annual trends and factors, such as energy commodities, shelter (housing), and transportation services. You can access this data on the MOAA National website, it changes monthly, at http://www.moaa.org/takeac5on/#COLA-Watch.

The 2.8 percent 2019 COLA is the second largest COLA of the past decade, trailing only the 3.6-percent COLA year of 2011. Some of the biggest factors influencing your COLA include the prices of food, clothing, housing, fuels and transportation fares, and charges for medical services and drugs. Measured price changes on those items over time determine the annual COLA. The calculation is made by comparing the average CPI from July through September of the current year to the average for the same months of the year prior.

It is important to keep in mind the CPI might not reflect your personal experience with price changes, but is rather a measure representing the experience of the average household.