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Taxes-101  
#21 Posted : Friday, August 29, 2014 8:49:46 AM(UTC)
Taxes-101

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Post #18

I agree with Restonham's comments in post #18. I typically address the averages but the DC area retirees would be at the rationally be at higher end of the pension values. Over taxation by Virginia is estimated to be in the range of $600 to $1,200 per year for each CSRS pensioner depending on pension value. It would even be beyond $1,200 for some very high grade levels with high numbers of years of service.

The law suit will ask for a refund of the unlawful taxation values for the past 3 years ($1,800 to $3,600 per pensioner). And to stop discriminatory taxation in the future per 4 U.S.C. 111.
The HalfBreed  
#22 Posted : Friday, August 29, 2014 8:38:54 PM(UTC)

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I feel for you folks. Growing up in NJ, after the military, I migrated to IL. I have many friends who moved to VA for jobs and retired there.
They have the same issues, but insist on staying in VA. NJ is just as bad, if not worse, but there are other places, like PA that would be a
good alternative, but alas, their roots are now there in VA, so they stay and curse the state.

I'm fortunate that I like winter and snow sports, and love the cold (peace and tranquility), as it's only 3-4 months of the year.
I posted this on their (my) FB page, and many are glad for me, but sad for the retirees in VA. It's for Lovers (and folks who like paying taxes).



No Illinois Tax

"As of 2011, Illinois does not tax income from retirement plans. It doesn’t tax withdrawals from IRAs. The state doesn’t tax rollovers from a traditional
IRA to a Roth IRA. It also doesn’t tax income from retirement annuities, 401(k) plans, 403(b) plans, 457 programs, retirement plans for self-employed people,
government/military Thrift Savings Plans, railroad retirement benefits, Social Security, federal retirement savings bonds or pensions."

I'll vacation in VA on occasion, but NEVER, EVER move there. Ditto for NJ and other tax-happy states. Good Luck in changing the status quo.





RETIRED CSRS 12/19/2012 @ age 57 w/39 years.
Good Bye Tension...Hello Pension !
Taxes-101  
#23 Posted : Monday, September 8, 2014 6:53:40 AM(UTC)
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On Sept 8, 2014 Congressmen Moran and Wolf were both mailed printed copies of the 30 page Power Point presentation on Virginia’s Unlawful CSRS Tax issue. This was a suggest ion by one reader who thought it possible we could by-pass the state and have the Fed issue guidance to stop the tax. Both Congressmen have high numbers of retired Fed employees in their districts. Congressman Wolf, first elected in 1981 is himself covered by CSRS. See more info at CSRStax dot com.

We will provide a presenter and or email the Power Point presentation for those that wish to present the information local Virginia at NARFE meetings. See more info at CSRStax dot com.
Taxes-101  
#24 Posted : Tuesday, September 9, 2014 6:09:59 AM(UTC)
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On Sept 9, 2014 the US Department of Justice was mailed letter on the unlawful Virginia tax requesting the Justice Department bring suit against the state of Virginia for violation of 4 U.S.C. 111. Attached to the letter is a printed copy of the 30 page Power Point presentation on Virginia’s Unlawful CSRS Tax. See more info at CSRStax dot com.
Taxes-101  
#25 Posted : Tuesday, September 9, 2014 5:19:30 PM(UTC)
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I will be discussing the CSRS unlawful tax with Government Executive magazine next week (Sept 15, 2014). This might get the issue some national exposure and the attention of some influential people that need to be aware of the discriminatory treatment of CSRS retirees. See more info on the web csrstax dot com.
Taxes-101  
#26 Posted : Sunday, September 14, 2014 5:57:33 AM(UTC)
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The discussion on CSRS unlawful taxes with Government Executive magazine has been rescheduled to Sept 19, 2014. This might get the issue some national exposure and the attention of some influential people that need to be aware of the discriminatory treatment of CSRS retirees. I will post info again after that discussion. See more info on the web csrstax dot com.
Taxes-101  
#27 Posted : Thursday, October 2, 2014 7:53:18 AM(UTC)
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Website updated Oct 2, 2014: CSRSTAX dot com. Website now includes a spreadsheet graphic showing exactly how CSRS Pensioners are illegally overtaxed… 88%! Absolutely outrageous! Still working to have this changed. A package on the issue was mailed to the Virginian Pilot Ledger Star newspaper in Norfolk last week. And to the the U.S. Justice Department the week before.

Keep in mind that when the complaint is filed with the court, the hope is many will join in the suite!
Dunleyg  
#28 Posted : Friday, October 3, 2014 6:23:03 AM(UTC)

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Each state is unique, but all states need to have equal treatment of income sources of its taxpayers. The states I am familiar with; Kansas treats pensions (Private, RailRoad, Government,Military, SSA) equally. Missouri (Just recently) changed the law so all MFJ pensions get a $32000 deduction, and it does so equally. Michigan on the other hand, just recently changed its laws to treat CSRS like a private pension plan, but still exempts Railroad, Military and SSA annuities. Those older than 67 are phased in, but those under 62 will have to pay income tax on their pension for as long as they live in the state. Some State employees pay tax on their annuity, but they are not that happy and are sueing. http://www.mea.org/retir...s-state-over-pension-tax Seems unfair, but if you want Fairness in a state, then go to the annual state fair and ride a merry go round, as the brass ring is closer than getting tax state reform.
Taxes-101  
#29 Posted : Friday, October 3, 2014 7:38:21 AM(UTC)
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# 28 Post – Dunleyg
If Michigan is taxing as you describe, that is taxing CSRS pension while exempted Military, Soc Sec etc., it is obviously DISCRIMINATORY. The State is in Breach of the two laws below. It’s seldom that states are challenged. But that’s what is necessary. They will never listen to reason. They just want the money.
JOINING THE SUITE: If you or others in Michigan (or another state) wished to join the suite, it can be filed in Federal Court against Michigan and Virginia. Those in other states would join shortly thereafter. This is my preference. EMAIL from the webpage: csrstax dot com.
1. Breach of Federal law (4 USC §111) allows states to tax Federal employees as long as the states do not discriminate against Federal Employees because of the source. Virginia is DISCRIMINATING against Federal CSRS pensioners.
2. Breach of Section 1; Amendment 14; U.S. Constitution: …The Equal Protection Clause of the 14th amendment of the U.S. Constitution prohibits states from denying any person within its jurisdiction the equal protection of the laws… By denying states the ability to discriminate, the equal protection clause of the Constitution is crucial to the protection of civil rights.
Taxes-101  
#30 Posted : Saturday, October 4, 2014 7:55:20 AM(UTC)
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#17 Posted by Outside

QUESTION was: With the generous age deduction for the elderly, etc as mentioned above, how much state income taxes do you think those 80,000 CSRS retirees pay?

ANSWER: 88% MORE!!!! See the numbers and comparisons which are based on average values on the website. It was added to the website on Oct 3, 2014.
csrstax dot com.
Taxes-101  
#31 Posted : Monday, October 6, 2014 8:09:45 AM(UTC)
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The chart on the website csrstax dot com was updated Oct 6, 2014.
It's more easily understood as INCOME vs. TAXABLE INCOME is highlighted.
Still, CSRS pensioners with the same average income pay 88% more taxes than those who have a combination of Social Security and pension. Scandalous!! And more importantly: ILLEGAL!
EngineerJim  
#32 Posted : Sunday, October 12, 2014 7:24:05 AM(UTC)
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Double check the VA state income tax calculations.
I am not a tax expert, but I think you didn't account for the standard deduction (line 10) and the regular exemptions (line 11, $930 per person plus another $800 for over age 65). See form 760

The VA forms are at their web site:
http://www.tax.virginia.gov/forms.cfm?formtype=all

I calculated the SS example tax to be $534 (line 5 = $12,000 SS)
and the CSRS example tax to be $1,196
I do get your numbers if I set lines 10 and 11 to zero and the line 4 age deduction to $12,000.
EngineerJim  
#33 Posted : Sunday, October 12, 2014 8:00:55 AM(UTC)
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1 $42,000.00 Federal AGI
2 $ 0.00 Total Additions from Schedule ADJ, Line 3
3 $42,000.00 Add lines 1 and 2
4 $12,000.00 Deduction for age (65 or older)
5 $12,000.00 Social Security Act and equivalent Tier 1 Railroad Retirement Act benefits
6 $ 0.00 State Income Tax refund or overpayment credit (reported as income on federal return)
7 $ 0.00 Subtractions from Schedule ADJ, Line 7
8 $24,000.00 Add Lines 4,5,6, and 7
9 $18,000.00 Virginia Adjusted Gross Income, Subtract Line 8 from Line 3
10 $ 3,000.00 Deductions-Standard: Filing Status Single=$3,000; Jointly=$6,000; Separately=$3,000
11 $ 1,730.00 1Exemptions
12 $ 0.00 Deductions from Virginia Adjusted Gross Income Schedule ADJ, Line 9
13 $ 4,730.00 Add Lines 10, 11, and 12
14 $13,270.00 Subtract Line 13 from Line 9 - Virginia Taxable Income
15 $ 533.50 Amount of Tax from Tax Table or Tax Rate Schedule page 37
16 $ 0.00 Spouse Tax Adjustment (Filing Status 2 only).
17 $ 533.50 Subtract Line 16 from Line 15
18 $ 0.00 Virginia tax withheld


25 $533.50 This is the Tax You Owe
EngineerJim  
#34 Posted : Sunday, October 12, 2014 12:57:44 PM(UTC)
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Originally Posted by: OUtside Go to Quoted Post
After looking briefly at the VA state income tax web site, I have two two comments on this discussion.

It's not correct to say VA taxes CSRS pension fully at 100% because the taxpayer reduces AGI by his recovery of amount invested in the pension (Safe Harbor, etc) which would reduce taxable income below 100%.

Second, in addition, VA allows age 65+ deduction of $12000 for each retiree, this together with standard deduction, exemptions, and basic income threshold taxable for a retired couple means the couple would pay no state income taxes for income well up into the $50 thousands per year.

Not exactly putting the hurt on for many retirees, it seems to me.
A single CSRS retiree renting in VA would pay a lot in state income tax. The "recovery" amount is only about $5,000 on an $80,000 pension (Lawyer with >30 years?). I estimate about $12,000 federal income tax (form 1040EZ) and another $3,800 VA state income tax. Part of the reason is that the $12,000 age deduction (>65) is eliminated $1 for $1 for income over $50,000.

Edited by user Tuesday, October 14, 2014 9:02:54 AM(UTC)  | Reason: VA age deduction reduced $1 for $1 over $50,000

OUtside  
#35 Posted : Sunday, October 12, 2014 3:35:02 PM(UTC)

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Jim, sorry, I originally read your example to apply to a married couple rather than a single tax filer. Your example of a single filer with income around $80 K has income about $25 K higher and one less mouth to feed than a married couple with income in the $50 K's. I still think the state is pretty generous to elderly retired feds and when you combine that with the more generous particulars of the CSRS system vs FERS, I think the CSRS retiree seems to be doing ok.

Edited by user Sunday, October 12, 2014 7:16:14 PM(UTC)  | Reason: Not specified

EngineerJim  
#36 Posted : Tuesday, October 14, 2014 3:23:20 AM(UTC)
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Although I don't see a ruling to change the way CSRS is taxed compared to a retiree with Social Security, I agree in part with the poster that CSRS is taxed unfairly. Social Security is simply treated differently (right or wrong).

Two identical workers, one under FERS and one under CSRS, who earned the same salary, at the same job, with the same credentials, experience, and total retirement income are treated significantly differently under VA tax law.

I prefer to do income tax comparisons using the single filing status. I would like to see income taxed the same no matter what life choices people made for themselves. i.e. married, children, etc. If you earned it, you should pay the tax. If people are married, I prefer to use the assumption they are equal and both worked for the same income. So a married couple should have twice the income of a single person and less housing costs since they share those (rent, utilities, insurance, etc).
Taxes-101  
#37 Posted : Tuesday, October 21, 2014 10:59:35 AM(UTC)
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Hello Engineer Jim…

Post 36: …Social Security is simply treated differently (right or wrong)… Two identical workers, one under FERS and one under CSRS, who earned the same salary, at the same job, with the same credentials, experience, and total retirement income are treated significantly differently under VA tax law…
COMMENT: Engineer Jim you are correct and it's wrong! FERS vs CSRS are taxed significantly differently. Yes unfairly, and more important UNLAWFULLY! See the Website: csrstax-com references to 4 U.S. Code § 111, and on Section 1; Amendment 14; U.S. Constitution: …The Equal Protection Clause.

Post 34: …{CSRS}taxpayer reduces AGI by his recovery of amount invested in the pension…
COMMENT: Social Security works in a similar fashion. If you are a high income pensioner all of most all of Social Security is taxable by the Fed.... EXCEPT 15% which is the Social Security recovery your mentioned above for CSRS.
Taxes-101  
#38 Posted : Thursday, November 20, 2014 12:06:17 PM(UTC)
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COMPLAINT WILL BE FILED WITH THE COURT ON OR ABOUT DECEMBER 5, 2014!!

The upfront money has been paid. From here on anyone who joins in the suite will get a free ride on that money!

TAX Case: Against the Commonwealth of Virginia:
I met with the attorney in Richmond on the Virginia tax case. The conversation went extremely well. Far beyond expectations! COMPLAINT WILL BE FILED WITH THE COURT ON OR ABOUT DECEMBER 5, 2014!! Subsequent to the filing a copy of the COMPLAINT will be on the website “CSRSTAX - COM” (put a period between CSRS and com) for anyone who wishes to read it.

Virginia has a somewhat clunky class action case set up. What happens: The attorney will file multiple complaints (one for each participate - I like to have as many participates as possible) on same issue. The Attorneys will request the courts to consolidate the cases into one case. After that, it is one case with multiple plaintiffs. Anyone that wants to join the suit will need to sign an agreement with the attorney so he can represent your interest. His payment will be 1/3rd of what he recovers for each individual plaintiff. If he recovers zero, the plaintiff pays zero. There are NO OTHER RELATED COSTS. The upfront money has been paid. From here on anyone who joins in the suite will get a free ride on that money!
Taxes-101  
#39 Posted : Friday, November 21, 2014 5:42:45 AM(UTC)
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CLEARIFCATION:

COMPLAINT WILL BE FILED WITH THE COURT ON OR ABOUT DECEMBER 5, 2014!!

The upfront money has been paid. From here on anyone who joins in the suite will get a free ride on that money!

The suite will demand refunds for the past 3 years (for those represented by the attorney). Refunds are estimated at an average of $750 to $1,200 per year for each pensioner represented by the attorney = $2,250 to $3,600 total. The attorney's contingency payment will be 1/3rd of what he recovers for each individual plaintiff over the past three years. If he recovers zero, the plaintiff pays zero. There are NO OTHER RELATED COSTS. The upfront money has been paid. From here on anyone who joins in the suite will get a free ride on that money! I encourage joining the suite. It up's the profile of the case to have many plaintiffs on this issue.

Years in the future: Suite will also demand that the state grant "COMPARABLE TAX EXEMPTIONS" in future years for CSRS pensioners that are "comparable" to those it grants for Social Security.
freeageless  
#40 Posted : Friday, November 21, 2014 1:21:25 PM(UTC)
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Originally Posted by: Taxes-101 Go to Quoted Post
CLEARIFCATION:

COMPLAINT WILL BE FILED WITH THE COURT ON OR ABOUT DECEMBER 5, 2014!!

The upfront money has been paid. From here on anyone who joins in the suite will get a free ride on that money!

The suite will demand refunds for the past 3 years (for those represented by the attorney). Refunds are estimated at an average of $750 to $1,200 per year for each pensioner represented by the attorney = $2,250 to $3,600 total. The attorney's contingency payment will be 1/3rd of what he recovers for each individual plaintiff over the past three years. If he recovers zero, the plaintiff pays zero. There are NO OTHER RELATED COSTS. The upfront money has been paid. From here on anyone who joins in the suite will get a free ride on that money! I encourage joining the suite. It up's the profile of the case to have many plaintiffs on this issue.

Who is the attorney handling the case?

Years in the future: Suite will also demand that the state grant "COMPARABLE TAX EXEMPTIONS" in future years for CSRS pensioners that are "comparable" to those it grants for Social Security.


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