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Military Finances 101: Why am I Getting A Second Refund?

Taxes

Did you get a second refund "check" from the IRS? What the heck is that all about? Don't worry. You or your tax preparer did your taxes correctly. This has to do with kind of a weird part of the Tax Code. The Code requires the government to pay interest it the refund is paid after April 15th. This is the case even though the due date for filing taxes was delayed until July 15th.

The IRS says the average interest payment is around $18.

There is a downside though. The payment is taxable. If your interest payment was $10 or more, you'll get a Form 1099-Int to document the interest payment. If your payment is below $10 and you don't receive a 1099-Int, you're still required to report the income on your 2020 tax return.

While this topic applies equally to civilians and military members and retirees that isn't always the case. There are several tax benefits available to military members and retirees. We think you should work with a financial and tax advisor that works with those differences every day. If you'd like to find out how we do things, give us a call or schedule a free initial consultation.


If you found this article useful, you might like the following blog posts:

Retired Military Finances 201: Remote Work and State Income Taxes


Retired Military Finances 101: State Income Tax


Watch Out for this Tax Tripwire





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