Been there. Tried that. They won't give me the T-Shirt. Unless something has changed, the VA will not do allotments from your disability pay. Only DFAS will, from your retired pay.
I thought so, but when I signed up for the SGLI autopay, it gave me the option to choose either.
I'm surprised. Maybe something changed? Back when I retired I was told no allotments from my tax free disability pay. Maybe you can now? but understand that if you do that, then you get no tax deduction from your taxable income, if you have a year where you qualify to deduct medical expenses. So I would say take it from the taxable retired pay. That way, if you have a year in your future where medical expenses exceed 10% of your AGI, then your premiums can count as such. Note that when you reach age 65, the threshold drops to 7% of your AGI.
7.5%, not 7.0% , but only through 12/31/2016. Next year, it's 10% for all ages.
Life insurance, ordinarily, isn't a "medical" deduction. Is life insurance through the VA somehow different?
Isn't the gross amount received from each source the same regardless of which source is used to pay the premiums? If so, for tax purposes it wouldn't matter which source was used to pay the premiums (even if the payments were deductible). Isn't paying the premiums from one of these sources simply a convenience?
Tom - Yeah. I don't know why I read "medical" where it quite clearly says "life". Life insurance is always paid with after-tax dollars and of course, is not tax deductible. However, there are some instances where if you pay for life insurance with before-tax dollars, that can make the insurance payout taxable to the beneficiary recipient. It wouldn't in this case. But then, congress can change that anytime they feel like it.