My combined income (MAGI) with my wife will be close to 218k, and I want to make sure I stay below that so we can contribute fully to our Roths. I'm looking at my LES and not really sure what I should be looking at. There is a box labeled Soc wage YTD. Is that my taxable income? So it doesn't include my traditional TSP contributions or non- taxable allowances (I've heard that BAH isn't taxable?).
Also, I travel a lot. Does per diem and/or other expenses count towards my taxable income? Is there a way I know how much money that was since it's not on my LES?
Thanks!
How to determine my taxable income and MAGI from my LES
byu/m_law1999 inMilitaryFinance
Posted by m_law1999
4 Comments
Anything that uses allowance is non taxable.
BAH and BAS are the 2 main ones.
None of your tdy pays are counted as taxable income
The confusing part is that Modified AGI (MAGI) is calculated using different income types depending for different purposes. [This article](https://smartasset.com/taxes/what-is-modified-adjusted-gross-income) explains what is included in MAGI for Roth IRA contributions income limit.
Looking at an Army LES, the row with taxable wages is labeled FED TAXES, followed by wages this pay period and then another box with WAGES YTD. The amount in this box on your December LES should match your Taxable Wages in box 1 of your W-2 for the year.
Travel expenses are reimbursements, so not taxable. Per diem is also not taxable. Anything with “allowance” in the name is nontaxable (except CONUS COLA, which is taxable). Isn’t military pay fun?!
Just do a back door Roth IRA if you’re going to be close.
https://www.physicianonfire.com/backdoor/
Same result (you get money, up to the $7,000 max for 2024, into your Roth IRA) and you don’t need to worry if you’re near the limit.
Per diem is not taxable income. It’s a travel reimbursement. Don’t worry about that.
Your “wage YTD” should be close to your taxable income for the year, as it accounts for tax free CZTE months. SOC WAGE YTD is income that is social security taxable, which I includes CZTE income. Social Security and Medicare taxes are still withheld on CZTE income.
Are you counting BAH and BAS in that 218k number? If so don’t. Also…https://www.dfas.mil/Portals/98/Documents/Military%20Members/Payentitlements/aboutpay/Army_reading_your_LES.pdf