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Your safety is our top priority. Please review our current policies/services:
- Call (760) 829-0175/0245/0105 or email firstname.lastname@example.org for appointments or assistance
- Individual/Couples Counseling sessions are available by appointment only (virtual appointments are encouraged)
- PFMP classes are offered via virtual platform
Please see the below information IRT Tax withholding. Review attachments to help better communicate the message. Your Command Financial Specialist (CFS) can reach out to our Personal Finance Management (PFM) Specialist (if needed) to gain clarity so that they can get the word out to your individual units. Our PFMs stand at the ready to provide clarity. Please look out for more information to be pushed out via DFAS/MOL.
President Trump Memo deferring the withholding of all eligible employees’ 6.2% OASDI
We recently received an email informing us of that on Aug 8th, 2020, the President signed a memorandum pertaining to a payroll tax deferral.
Payroll taxes are federal, state, and local taxes withheld from an employee’s paycheck by the employer. These taxes consist of income taxes, unemployment taxes, and deductions for (FICA) Social Security and Medicare taxes.
Federal Insurance Contributions Act (FICA) consists of current tax rate for Social Security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total. Combined, the FICA tax rate is 15.3% of the employees’ wages.
Specifically, the temporary change will defer the withholding of all eligible employees’ 6.2% OASDI. Those with wages in excess of $4,000 are not impacted by this tax deferral. When implemented the 6.2% OASDI deferral will be effective until 31 Dec. 2020.
The deferrals will apply to all federal employees making less than $104,000 per year, or $4,000 per pay period. Simply stated…this is a short-term loan that will need to be repaid in full, and not an increase in take-home pay. In the short term, you may see an increase in take-home pay, but unless Congress pass COVID-19 legislation to forgive the payroll taxes that is due, you will likely will be expected to pay that money back some time next year in 2021…for tax year 2020. (Ouch!) I am quite sure you will be getting calls from sales people soon with “Payroll Taxes Saving Strategies and Scams.” Take heed and extreme caution.
Meanwhile here’s a simple effective idea that will help…
I would suggest everyone use the IRS user-friendly withholding calculator to compute the dollar amount of your personal withholding. (Don’t worry; it is handy enough to compute what you will owe from now until the end of the year).
Set aside that amount each pay period in a separate saving account at your bank or credit union to pay back your taxes. You can keep the interest earned! Otherwise by some estimates, you will have to double your regular payroll tax rate during the first four months of 2021, and it is possible that if you do not do so, you will have to pay interest and penalties on amounts still owed if they’re not paid back the tax due date.
Individual Financial Counseling
BRS? Are You Getting Your Full Match?
Learn more, see your Command Financial Specialists for info and Class Dates.
Free Thrift Saving Plan (TSP) classes, Open to everyone. Meets 4th Fri of every month at Frontwave, Building 1105, formerly Pacific Marine Credit Union.
From 9-10am. For more info call (760) 725-/6098/9478 or email: email@example.com
What is the Thrift Savings Plan (TSP)?
The Thrift Savings Plan (TSP) is the federal government’s “defined contribution” plan; it works similar to a 401(k). Federal civilians and uniformed services members can contribute a portion of their salaries to their TSP accounts and decide how that money should be invested.
What is the Blended Retirement System (BRS)?
BRS is a new retirement system for some members of the uniformed services. In exchange for a 20% reduction in
their military retirement annuity, which they still get if they serve 20 years or more, members covered by BRS receive TSP contributions from their employing service in addition to other benefits.