A warning for newly retired military members: If you have military retirement pay and take a civilian job, you may be pushed into a higher federal tax bracket, particularly if your spouse also works. To help prevent a big tax bill, complete Form W-4P before you retire to designate how much should be withheld from your monthly retirement pay. Then, when you start a civilian job, fill out Form W-4 to withhold additional tax. How do you know how much should be withheld? Use the IRS’s Tax Withholding Estimator (https://bit.ly/3VjGqR1 ) or contact us. Note that although retirement pay is taxable, Veterans Administration (VA) disability compensation and some other VA benefits aren’t. © 2024