PSPRS Refund Update

My agency has just announced they will be issuing refunds for the Hall-Parker court decision on August 25th (pending any last minute changes).  Since most of the visitors to this site are members of my agency I will address some of the options our Human Resources Department will be giving us.  If you work for another agency you still may get something out of this as you will likely get similar options. Continue reading

Understanding Your Tax Bracket vs. Effective Tax Rate

Did you know that if you are in the 25% tax bracket you do not pay 25% tax on your income?

Think about this for a second.  In 2016 a married couple who made $75,300 would be in the 15% tax bracket.  That would mean you would owe taxes of $11,295 ($75,900 X .15).

But, if you made $1 more in the year or $75,301, you would jump up to the 25% tax bracket.  That would mean you would owe taxes of $18,825 ($75,901 X .25).

You would keep $64,005 if you made $75,300.

But you would only keep $56,475 if you made $1 more.

If our tax system worked this way there would be no incentive to work harder and make more money?

I’ve had conversations with officers who didn’t want to work more overtime because it would put them in a higher tax bracket.  Luckily this is not how our tax system works. Continue reading

Understanding Withholding Taxes

The first misconception everyone needs to understand is the money coming out of your paycheck for taxes has basically nothing to do with how much money you owe in taxes.

The money that comes out of your paycheck is only an assumption of how much tax you may owe at the end of the year (more accurately on April 15 the following year).  If too much is taken from your paycheck you get a refund of the difference.  If not enough is taken out you owe the difference.

Now that we’ve gotten that out of the way we can start to break down how tax withholding works. Continue reading

New and Improved PSPRS Refund Calculator

My apologies for my original instructions on calculating your PSPRS Refund.  In my haste to get the information out to people in my agency I did not explain who is eligible for the refund.  The spreadsheet that I attached also did not work to the penny for everyone and I got some complaints.  The new spreadsheet that is attached at the bottom is much easier and more accurate.

Continue reading

Merry Christmas From Your Retirement Account

Understanding what owning stock means is not always easy, especially when your retirement account actually owns shares of a mutual fund and not individual stocks. The simple answer is stock represents a partial ownership in a company.  As the value of the company goes up and down so does the price of the stock.  This will be explained in a separate post.

There is another benefit of owning stock that a lot of people aren’t aware of, but it is very easy to understand and it is called DIVIDENDS. Continue reading

The Dallas Police And Fire Pension System And What It Means For You

On October 4, 2016 Dallas Police Chief David Brown retired. Chief Brown became nationally known after the July 7th shooting that killed five police officers. I remember being impressed with his press conference and the emotion he had.

What wasn’t known to me at that time was the scrutiny Chief Brown had been facing before that day. The Dallas Police Department was losing more and more officers to neighboring agencies that pay more. The department has apparently been understaffed as budget cuts have prevented the department from hiring more officers to fill their vacancies. Due to recent increases in crime and being understaffed, Chief Brown had been reassigning officers to different assignments. Many were being reassigned swing and night shifts causing the department to have lower morale and anger towards command staff. Continue reading

How To Transfer Time in the Arizona State Retirement System to the Public Safety Personnel Retirement System

In Arizona most Officers get their certification (AZPOST) by going through the police academy after their department hires them.  For some agencies while you are in the academy your contributions and your employer’s contributions to your pension are deposited into the Arizona State Retirement System (ASRS).  This is a pension system for non-sworn employees.  Once you graduate from the academy and become a sworn police officer you are automatically transferred to the police pension plan or the Public Safety Personnel Retirement System (PSPRS). Continue reading