Salinas, CA Retired Military Often Underestimate The Taxes They Will Have To Pay

Many military retirees forget how complicated the tax system can be in the U.S. after serving overseas.  The IRS says that almost half of the unpaid taxes that are owed by current and retired federal employees at tax time are owed by retired military.  When retiring from the military, you need to fill out a form W-4P which tells the Defense Finance and Accounting Service how much tax you want withheld from your retirement pay.  Many employees underestimate this and end up owing interest and penalties.  To find out what a logical amount to have withheld is, go to www.kiplinger.com/links/retireetaxmap.  If you decide that you need to change your withholding, call 1-800-321-1080 or if you have an online account you can change it at https://mypay.dfas.mil.