NukeWorker Forum

Career Path => Navy Nuke => Navy:Staying In => Topic started by: Specterx96 on Dec 25, 2010, 01:47

Title: Capital Gains
Post by: Specterx96 on Dec 25, 2010, 01:47
This may need to go in the navy nuke section, but it is a tax question:
How do the new capital gains laws starting next year apply to navy re-enlistment bonuses? Is it the full 55% for a 65,000-100,000$ bonus or just the straight 20% like other bonuses under 25,000$?
Title: Re: Capital Gains
Post by: Rennhack on Dec 25, 2010, 11:32
In the United States, we put our Dollar Signs on the left.  You have obviously spent too much time over seas.
Title: Re: Capital Gains
Post by: Gamecock on Dec 27, 2010, 10:56
This may need to go in the navy nuke section, but it is a tax question:
How do the new capital gains laws starting next year apply to navy re-enlistment bonuses? Is it the full 55% for a 65,000-100,000$ bonus or just the straight 20% like other bonuses under 25,000$?

It doesn't effect bonuses, as bonuses are not capital gains.  ::)

It is reported in the wages block of your W-2, so you pay taxes on it based on your marginal tax rate, just like all other earned income.

Cheers,
GC
Title: Re: Capital Gains
Post by: traveltax on Jan 06, 2011, 10:12
This may need to go in the navy nuke section, but it is a tax question:
How do the new capital gains laws starting next year apply to navy re-enlistment bonuses? Is it the full 55% for a 65,000-100,000$ bonus or just the straight 20% like other bonuses under 25,000$?

Gamecock is correct- bonuses are wages, not investment gains

Title: Re: Capital Gains
Post by: M1dn1gh7 on Jan 15, 2011, 09:34
I have a question on a similar note, does anyone know if we get the taxes paid from bonuses? I keep hearing mixed information and I get no help from CFC's.
Title: Re: Capital Gains
Post by: Gamecock on Jan 15, 2011, 09:51
I have a question on a similar note, does anyone know if we get the taxes paid from bonuses? I keep hearing mixed information and I get no help from CFC's.

Unless you got your bonus awarded to you in a tax free zone, you are required to pay taxes on it at your marginal tax rate.

Cheers,
GC
Title: Re: Capital Gains
Post by: traveltax on Jan 15, 2011, 09:59
I have a question on a similar note, does anyone know if we get the taxes paid from bonuses? I keep hearing mixed information and I get no help from CFC's.

Let me rephrase your question and tell me if I am wrong:
"Will the payroll agent/company withhold tax on my bonus?"

Ultimately, that is a agent/employer determination (normally, they are required too for US employers, but I do not know where this employer is based) Assuming this is your question, the withholding or amounts taken from the bonuses are not THE tax payment- they are estimated withholding payments. The actual tax owed is based on the rest of your income and gains for the year - the "marginal tax" of each additional $ earned, as Gamecock mentioned.
Title: Re: Capital Gains
Post by: Cycoticpenguin on Jan 15, 2011, 06:22
I have a question on a similar note, does anyone know if we get the taxes paid from bonuses? I keep hearing mixed information and I get no help from CFC's.

yes, they take your taxes out of your bonus before you receive it.
Title: Re: Capital Gains
Post by: OldHP on Jan 15, 2011, 08:01
yes, they take your taxes out of your bonus before you receive it.

See post #6 from the tax professional!  :)
Title: Re: Capital Gains
Post by: Cycoticpenguin on Jan 16, 2011, 07:32
See post #6 from the tax professional!  :)

He was ambiguous in his answer, relating it to individual companies discretion. I was merely augmenting his answer with an affirmation, that yes, bonus's get taxed before you receive them.
Title: Re: Capital Gains
Post by: M1dn1gh7 on Jan 19, 2011, 08:39
thanks again everyone!
I am definitely looking forward to my tax return then. you guys all rock!
Title: Re: Capital Gains
Post by: Jechtm on Jan 25, 2011, 09:59
This may need to go in the navy nuke section, but it is a tax question:
How do the new capital gains laws starting next year apply to navy re-enlistment bonuses? Is it the full 55% for a 65,000-100,000$ bonus or just the straight 20% like other bonuses under 25,000$?

TSP! 100% your bonus, you won't have to worry about the tax laws and you won't see it for 40 years!

-this was a joke and I am not even sure if this true...

someone fix me.
Title: Re: Capital Gains
Post by: TJ Nuke on Jan 26, 2011, 08:20
TSP 100%???  Consider your cash needs and marginal tax rate for the year you get your bonus.  Depending on what time of the year you get the bonus, remember there may be another installment to come.  Also, the penalty for pulling from your TSP too early because you really can get by without it is 10% plus you will then have to pay tax on what you pull unless you meet a special exception.
Title: Re: Capital Gains
Post by: MMM on Jan 29, 2011, 08:12
Yes, you can put 100% of your bonus into TSP, as long as you set it up before you get it. Another option is to reup in a tax free zone, then get the whole thing without taxes.
Title: Re: Capital Gains
Post by: Cycoticpenguin on Jan 30, 2011, 09:55
Yes, you can put 100% of your bonus into TSP, as long as you set it up before you get it. Another option is to reup in a tax free zone, then get the whole thing without taxes.

This cost benefit analysis needs to be factored in with a couple things

1) time in rate
2) money lost from not having BAH
3) "benefits" of being an E-5

1 year of BAH in norfolk is around 19,000 a year, tax free. Time in rate is worth gold as well.

My point is, yes, 60,000 tax free looks great, but if you are missing 20K from BAH, whats the point?