Question about BAH and income

[Sean Lee]

I understand that the BAH is tax exempt, but does your BAH income qualify as income for the sake of auto loan and mortgage applications? Say I make 40k base pay and 20k BAH annually, will my auto/mortgage loan be based on 60k a year income or 40k a year income?

Also, if we don't use up all of the BAH for housing (as in living with roommate(s) and splitting the costs), do we get to pocket the rest of the BAH or do we have to give it back? To me understanding, you get to keep all your BAH regardless of how much of it you end up spending.

Thanks for clarifications!

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[colbgw02]

Yes, it qualifies as income for loan purposes.

They won't ask questions about how you're spending your BAH. It was relatively common for single residents from my hospital to have roommates and save a nice chunk of change each month.

 

[bobbyseal]

When you apply for your auto loan you would want to show your end of month pay stub so that the bank can see what you are actually taking home in income. If you show your 1040 tax form, the BAH/BAS won't show up as they are nontaxable. On the other hand, special pays like ASP, ISP show up on your 1040.

 

[jabreal00]

Your BAH is included in your bi-monthly LES payment. Usually you can use your monthly LES as proof of insurance. BAH is calculated into what you take home every month. If your rent is below your BAH it just means you are living below your means so you can save more.

 

[pgg]

When you apply for your auto loan you would want to show your end of month pay stub so that the bank can see what you are actually taking home in income. If you show your 1040 tax form, the BAH/BAS won't show up as they are nontaxable. On the other hand, special pays like ASP, ISP show up on your 1040.

They also show up on the LES on the month you receive them.

CSB: Not too long ago, we refinanced our rental property and I provided an LES showing my MSP/ISP payment to the loan officer ... who multiplied that month's income by 12 to arrive at a very flattering annual income.

 

[Chonal Atresia]

They also show up on the LES on the month you receive them.

CSB: Not too long ago, we refinanced our rental property and I provided an LES showing my MSP/ISP payment to the loan officer ... who multiplied that month's income by 12 to arrive at a very flattering annual income.

I don't know if I would call the yearly income "flattering" - my last year on active duty my pay was in the 3rd percentile in my specialty based on MGMA numbers. Insulting, not flattering.

 

[Sean Lee]

Thanks everyone!

I am gearing up for my USU interview soon, wish me luck!

 

[deleted444089]

What pgg is saying is that his yearly income appeared flattering because his once yearly MSP/ISP, along with everything else on his LES, was multiplied by 12 to arrive at a nice chunk of change.

I don't know if I would call the yearly income "flattering" - my last year on active duty my pay was in the 3rd percentile in my specialty based on MGMA numbers. Insulting, not flattering.

 

[Chonal Atresia]

What pgg is saying is that his yearly income appeared flattering because his once yearly MSP/ISP, along with everything else on his LES, was multiplied by 12 to arrive at a nice chunk of change.

Didn't pick up on that. Makes more sense.

 

[pgg]

What pgg is saying is that his yearly income appeared flattering because his once yearly MSP/ISP, along with everything else on his LES, was multiplied by 12 to arrive at a nice chunk of change.

Exactly - 4 yr MSP/ISP for ansthesia is $110K. x12 = $1,320,000

As it is, when paid once per year it puts my total .mil pay around the 25th MGMA percentile for the least-paid region of the country. (Factoring in the value of getting a year closer to vesting in the all-or-nothing pension boosts that, although I'm sure not everyone here would agree on the "right" way to do that math.)

 

[Sean Lee]

Is the BAH exempt from federal, state, local, and social security taxes? Or is it just federal taxes?

 

[colbgw02]

BAH and BAS are not considered income. They didn't even show up on my W2 last year.