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Is the GMO bonus tax free in the desert?

Discussion in 'Military Medicine' started by NavyDMO, Apr 9, 2007.

  1. NavyDMO

    NavyDMO 5+ Year Member

    Mar 27, 2006
    As I understand it so far any contract for a bonus signed while deployed is tax free. I will both sign and recieve my GMO bonus from Iraq. The second piece of information is that we can not make more than the MCPON. Iam here for 7 months give or take. I have already asked around and some GMO's have been taxed. The Chiefs opinions are more along the line that it is cut and dry tax free. Any information would help.

    Second, has anyone had to submitt their contract from abroad. My command said it would be done while deployed and here they say it should have been done in the rear????? We certainly don't have PSD out here. Again, any advoce would be great.
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  3. usnavdoc

    usnavdoc Senior Member 10+ Year Member

    Apr 5, 2005
    The Bonus paperwork can be done from the rear or by you in theater. If you are going to do it just draft the paperwork have your CO sign it and forward it up the chain. Its easier to get in touch with your rear party and have them take care of it for you.

    As far as being taxed. You will be taxed on everything above MCPON level. And your bonus will be taxed at a lesser rate but still taxed. Your chiefs are wrong likely because for them and any lesser ranking sailor it is just as cut and dry as they say b/c they dont have to worry about making more than the MCPON.
  4. i want out

    i want out Member 10+ Year Member

    Jul 12, 2006
    I can tell you from personal experience that the ASP is taxed as a bonus at exactly the same rate that it is at home.

    I have submitted, and received mine twice while in a tax free zone, and it was taxed as a bonus on both occassions.

    as far as who is going to submit your contract, I did one from abroad, and had one done by the command back home. They both worked, as long as all the paperwork is there, it will get to you eventually.

    i want out
  5. IgD

    IgD The Lorax 10+ Year Member

    Jul 5, 2005
    You could also consult with an accountant and file for the refund.
  6. The White Coat Investor

    The White Coat Investor AKA ActiveDutyMD Physician Partner Organization 10+ Year Member

    Nov 18, 2002
    SDN Partner
    You mean you got the taxes you paid on ASP paid to you in a war zone back? And didn't get audited?
  7. NavyFP

    NavyFP Senior Member 10+ Year Member

    May 18, 2006
    Manning a Cubicle
    OK, here is the deal. Officers in a combat zone are granted tax free status on the monthly income that is up to that which the most senior enlisted would get if in the area. For Navy that would be the MCPON (Master Chief Petty Officer of the Navy). It works out to be about $6K per month. For most GMOs they earn less than that so part of the bonus would be tax free. But not all of it.

    When I was in the zone, my bonuses were fully taxable. (and it peeved me.)
    But that is the way it is. They will show up on your W2 and they do take out taxes.
  8. The White Coat Investor

    The White Coat Investor AKA ActiveDutyMD Physician Partner Organization 10+ Year Member

    Nov 18, 2002
    SDN Partner
    I'm not sure any of the special pay (let's not call it a bonus please) is ever tax-free. Does anyone know anyone who for sure didn't pay tax on even part of their ASP or ISP payment?

    I am heading to the desert this fall and am trying to make plans to max out the Savings Deposit Program in my first two months there as well as squirrel as much of my other pay away into the TSP as I can. I'll have my 15.5K for 2007 already in there prior to the deployment but would like to put part of my ISP in there, which I can only do if it is tax exempt.

    This fall my pay will look like this:

    Basic Pay: $4392/month
    VSP: $416.67/month
    BAH: ~1500/month (but already tax exempt)
    BAS: $192.74/month (but already tax exempt)
    BCP: ~$200/month
    Hazardous Duty Pay: $150/month
    Hostile Fire Pay: $225/month

    A lump sum ISP in November

    The senior enlisted salary is $5512.80+$166.67 allowance + $225 (hostile fire) + $150 (hazardous duty)= $6054.47. Is this the amount that is tax free?

    Exactly what portions of my income will be tax free? As I understand it, only the basic pay, the hazardous duty pay, and the hostile fire pay.

    But will I also get my VSP and BCP (since even with it I would be making less than the senior enlisted dude of my service?) If I get those, I don't see any reason why I shouldn't also get a pro-rated percentage of my ISP/ASP tax-free too, at least up to the maximum enlisted salary.

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