I hope tomorrow is going to be the magic day. I want to get this stuff knocked out before I deploy. Maybe take $10k of the money and get a 737 type rating along with the ATP; or take $10k of my own money.

 

I wonder if you're deployed in the same month you actually recieve a VSP payoff (day after Date of Separation), whether you can get it all tax-free?

Hmmm....

Or maybe take a deployment as a reservist (shorter than 179) and make sure you get in-county in the same month as your DOS....

This works with reenlistment bonuses...

By the way: per the AF Times:

Force-shaping update expected Wednesday

Staff report
Posted : Tuesday Aug 21, 2007 14:04:23 EDT

The Air Force should announce Wednesday further details for the service’s next wave of officer and enlisted manpower cuts, officials at the Pentagon told Air Force Times on Tuesday afternoon.

Air Force officials have estimated about 4,000 full-time positions will need to be cut in 2008 through attrition, voluntary separations and showing airmen the door.

This year’s force-shaping measures are in their final stages. In July, the service chose about 300 captains and majors for involuntary separation.

The Air Force expects to end fiscal 2007 with about 334,000 active-duty airmen, 12,000 fewer positions than the service started the year with. By the end of 2009, the Air Force’s stated goal is to have the active-duty down to 316,000 positions.

While Air Force leaders and some lawmakers have said the service will need more airmen to support the Army and Marine Corps, which are both adding thousands of troops to their end strengths, no one has offered firm numbers on how many positions the Air Force will need or how to pay for them.

The only airmen Congress has moved to protect from cuts in 2008 are about 800 medical positions, mostly filled by enlisted airmen.

 

Since they pay you the VSP after you separate(at least according to friends who took it last year), I don't think the tax free exemption applies.

 

tax free exemptions are limited for officers

 

ok..but the point is that even if it did apply..you're getting paid after being back stateside..and thus not in the tax free zone when they paid that money..so however limited they are..I don't think it would work anyways.

 

All,

This will be for you and your tax planner. I had a Tax Free the month of my DOS w/ VSP. That month's income is tax free. The TSP is to be paid on your DOS, per the reg/messages- it's just that Finance holds out for about a week to make sure you had a good status and were not a criminal discovered on your DOS. Really. So, I'm planning on about a $6800 cha-ching, I'll get a ref and paste below...

http://www.defenselink.mil/militaryp...atzone_05.html

start quote: Combat Zone Exclusions


Being assigned to or working in a combat zone triggers another tax advantage. Earnings received while in the combat zone are excluded from taxable income. This exclusion is unlimited for enlisted members and warrant officers and is limited to $6867.60 per month in 2007, for officers. If you spend a single qualifying day in the combat zone, your pay for the entire month is excluded from taxable income.

Bonuses and special pays are also excluded from taxable income if within the previously stated limitations and earned in the same month in which you served in a combat zone. For example, an enlisted reenlistment bonus is excluded from taxes if the member reenlists in the same month in which the member served in a combat zone. Since there is no limitation on amounts excluded for enlisted members, the entire reenlistment bonus would be excluded. As another example, an officer's flight pay would also be excluded from taxable income, but only up to the point which basic pay and the flight pay do not exceed the maximum enlisted pay amount. The Career Status Bonus received by members who may choose between High-3 and CSB/REDUX retirement plans and who elect the CSB/REDUX retirement plan also falls in this category. To be considered "earned" in the combat zone, the CSB/REDUX election must be accepted by the Service and considered final in the month in which the member was in the combat zone. End Quote...

If you take a Guard AGR, you have to pay TSP back. Any others you pay back upon Retirement, in installments, and small ones at that. See other posts for the calculation. It's a nice up front transition loan. Can't wait til they try and buy us back in a few years, then VSP is not repaid! Not that I'd return.....

 

I assume you mean VSP/ISP?

Wednesday morning...no update yet.

 

The plan probably won't be posted to the FS website until AFPC releases the message down throught the chain of command via email, first.
They could at least throw us a bone and post the updated matrix...

 

Just announced...exactly what I posted on the very first post of this thread. I'll be real surprised if they hit the numbers they need. Looks like 3 times ISP for 12-15yr groups though which is nice.

http://www.af.mil/news/story.asp?id=123065474


"The (2008) force-shaping program will again be targeted by skill and year group, and primarily officer-focused. However, we will require far fewer losses in fiscal 2008," Colonel Armentrout said.

The Air Force will begin the 2008 force-shaping program by offering voluntary separation pay to approximately 200 officers in overage career fields with 12 to 15 years time in service. Officers approved for VSP will receive a lump sum payment equal to three times the standard involuntary separation pay rate, but must separate before June 30, 2008. Eligible officers will be able to submit applications for VSP from Sept. 5 of this year until the force-shaping goals are reached, or March 31, 2008; whichever occurs first.

Additionally, under the 2008 program, officers with a minimum of 20 years active service and at least 8 years of commissioned service may apply for retirement.
Eligible colonels and lieutenant colonels may also apply for a waiver to retire with two years time in grade instead of three. Retirement dates must be no later than Sept. 1, 2008.

The Air Force will also hold a force-shaping board in March 2008 to reduce the force by approximately 130 officers in overage career fields in the 2005 year group. In addition to career fields that are short or balanced, Airmen in the 14N and 32E specialties will be exempt from the board.

Currently, no service commitment waivers are offered to enlisted members under the 2008 force-shaping program.

"For the enlisted force, we will be able to use the tools we have in place to adjust and keep the force balanced," Colonel Armentrout said. "As we go through the year we assess (the process), and if it doesn't look like the goal is going to materialize, we'll look at waiving service commitments for enlisted."

The new force-shaping message supersedes prior messages. Other force-shaping programs such as "Blue to Green," for officers and enlisted, and the enlisted retraining program remain open. The expanded Palace Chase program for fiscal 2008 remains open only for officers in the 2005 commissioned year group. Other officers and enlisted Airmen may apply for Palace transfers to the Guard or Reserve, according to Air Force Instruction 36-3205.

 

This doesn't mean an exclusion of up to $6867.60 of taxes. It means that only the first $6867.60 of taxable income will be excluded. So your cha ching won't be that much more than normal.