Jim just got audited. Apparently, the IRS thinks all contractors in Iraq and Afghanistan are living in plush 5 star hotels eating grapes and drinking fancy champagne. Unknown even to some CPAs here the IRS has this little-published rule that once an overseas contractor enters the higher tax bracket from his bonuses he stays there. Even after you subtract the 90K federal exemption and do your write-offs for house payment or whatever, that remaining income is STILL taxed as if you were making 100K plus. Basically it's like this.
Say you made $150,000 (i should point out that this seems like a lot but you have to consider that this is based on an anywhere from 60 to 80 hour work week. No overtime bonuses, just bonuses for being overseas and in a war zone. So if you think you're not making as much, all you 40 hour a week people DOUBLE your paycheck and then compare). Take out the $90,000. Say you're a Texas resident like me and your state doesn't bend you over and take money. SO now you're looking at $60,000. Say you deduct $10000 or so. Now, you would THINK that you're now only on the hook for $50,000 of taxable income right? WRONG. The IRS is going to tax that $50,000 as if it was still $150,000. Nice.
My friend asked the IRS lady why. Her answer was basically "well because you make that extra money." basically her whole reason was because we make more they WANT more. Never mind we make more because we work 10 to 12 hours a day 6 or 7 days a week. Never mind most of us live in tents or small metal shacks. Never mind we're also going without the same luxuries the troops do without. We don't get to go get drunk at the bar and enjoy a 2AM run to IHOP. Never mind the same bombs and bullets that kill troops also kill us. Oh sure not in the same numbers, but we die all the same. You know what else we do without? THANKS. Nobody throws us a parade when we get home and nobody here besides our friends and family gives a damn if we die. Someone has to do the job. Someone has to clean toilets and serve food and since the troops nowadays are above that, we have to hire civilians to do it. It's all good though. I don't need the parades or ribbons. Yeah I went over for money. Mostly for money. I also went to learn more about how to do my job and to go experience more of the world and see things I never thought I would. I mean, where else would I get the chance to take a picture of myself wearing a giant foam cowboy hat that says TEXAS and a poncho with the Houston Texans logo in front of the Crossed Swords Monument in downtown Baghdad? I also like to think I was doing my part and I think I did more to aid the war effort than i ever did when I was enlisted back in the states. I love my country. What i DIDN'T think and i don't appreciate is that the IRS thinks they can just help themselves to more of my money to blow on BS like Cash for Clunkers because they just ASSume i'm living the good life.