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63. Tax Strategy for Federal Firefighters Before April 15 - Matt Stelmaszek
3 Plays3 minutes ago
Tax season isn’t something we talk about much in the firehouse — but maybe we should.
In this episode, we sit down with former Air Force firefighter turned financial and tax expert, Matt Stelmaszek, to break down what federal firefighters need to know before the April 15 filing deadline. We cover:
- How the tax system actually works (and why more OT doesn’t “tax all your income higher”)
- The difference between deductions and credits
- Traditional TSP vs Roth IRA considerations
- “No Tax on OT” for federal firefighters — what qualifies and what doesn’t
- Roth IRA contributions you can still make before the deadline
- Common financial mistakes service members make
This episode is a little outside our normal programming — but it’s practical, timely, and designed to help firefighters avoid leaving money on the table.
If you’re a military or federal civilian firefighter, this one matters.
Recommended
Transcript
Introduction to Roll Call Coins
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Speaker
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Overview of AOS Services
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Speaker
This episode of the Fire Dog Podcast is supported by AOS Services, the one-stop shop for firefighting equipment compliance built for the DOD. At AOS Services, they help military fire departments stay mission-ready with customized programs that bundle everything from SCBAs and compressors to hoses, ladders, PPE care, rescue gear, and more. Their teams work worldwide, so whether you're stateside or overseas, they've got you covered.
00:00:50
Speaker
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Meet Matt Stelmashack: From Air Force Firefighter to Tax Specialist
00:01:00
Speaker
This is the Fire Dog Podcast.
00:01:12
Speaker
Welcome, my name is Matt Wilson. and Thank you for listening to episode 63 of the Fire Dog Podcast. Today's episode, we're going to hear from former Air Force firefighter and current tax specialist, Matt Stelmashack. Matt went to Indiana University and spent four years active duty, eventually separating from the service at Nullis Air Force Base.
00:01:28
Speaker
He's now building his own tax practice with a specialty in tax planning for federal firefighters. The episode is a little bit of a curveball from our normal programming, but the tax filing deadline is approaching.
00:01:39
Speaker
We wanted to put out something practical that helps firefighters understand the unique planning points that apply to them this tax season. It is my pleasure to welcome to the podcast, Matt Stelmachek.
00:01:49
Speaker
All right. So a little bit of a curveball from our normal programming here, um bringing on a former firefighter, current tax specialist, and a pretty timely episode being tax season and 2025 tax year is a a unique year with tons of planning points that are applicable to firefighters.
00:02:16
Speaker
And so, Matt, we're glad to have
Understanding Enrolled Agent Certification
00:02:18
Speaker
you on. Will you give us a little bit about yourself, your your background in the Air Force, and now your transition to civilian life? Matt. Yeah, yeah. chris ah Chris, Matt, thanks for having me on. I'm excited to to talk tax. Not everyone, you know, every day asks you to talk about tax. So this is exciting for me. ah I was an Air Force firefighter at Aviano when I joined in 2021.
00:02:44
Speaker
And then we PCS'd to Nellis. And then I separated from Nellis in 2011. the fall winter of 24.
00:02:55
Speaker
I came back as a civilian on Tonellis and then ah
Tax Planning for Military Personnel
00:03:00
Speaker
my wife's active duty do so we were going to leave anyway and so when they offered the DRP and they're like hey we'll pay you for six months to not work I got Chief Thompson's blessing to to do that and so I took that and that's when I started really transitioning into a big tax practice.
00:03:17
Speaker
And so now you're working on a master's degree in tax using your GI Bill. Was that something you'd started while you were in um in the Air Force?
00:03:28
Speaker
No, I did the ah the chartered financial consultant through American College while I was in. And then once I separated, i decided... Like this benefit, I didn't stand long enough to transfer it.
00:03:40
Speaker
So it was either use it or lose it for me. And so
Demystifying the U.S. Progressive Tax System
00:03:44
Speaker
I just decided that the master's in tax at Penn State would line up with my career goals and ultimately what I wanted to do with my own tax practice.
00:03:54
Speaker
Awesome. Actually, that's that's a great shout out for ah the American College of Financial Services. Any ah any nerds out there listening, um i also got to benefit from their veteran scholarship and do a master's degree in finance and the certified financial planner coursework. Full ride.
00:04:14
Speaker
um So a phenomenal program for anybody that's thinking about, you know, getting into finance or tax or anything like that when they get out of the military. So you recently passed the three enrolled agent exams. Will tell us a little bit about what that means?
New Tax Law 2025: No Tax on FLSA Overtime
00:04:30
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Yeah.
00:04:30
Speaker
Yeah, so an enrolled agent is – it's recognized by the IRS. It's the only certification that's nationally recognized. And so it's three exams. They're broken into three different parts. So one's on individual tax.
00:04:47
Speaker
One's on business and then one is on policy and procedure. Enrolled agents have unlimited representation rights before the IRS. So, you know, you open your mail and you get a letter from the IRS and says, hey, we want to look at, you know, tax year 22 or, you know, whatever tax year hey, You have an outstanding tax liability.
00:05:05
Speaker
An enrolled agent has unlimited representation rights, and they can represent you before the IRS. And so the only two other people who have unlimited representation rights are CPAs and attorneys.
00:05:18
Speaker
Got it. Okay. And so now you've you've started Stellar Wealth Management, where you specialize in tax planning for military and then i guess everything that's kind of military adjacent, right? From ah military landlords to federal firefighters.
00:05:39
Speaker
ah We talk a little bit about your specialty. Yeah. So it's it's kind of like you said, and anything that kind of starts with military and goes from those branches. So for the military folks, like they tend to have complicated state tax returns, especially for spouses. You know, what what qualifies as income? What do you need to claim? Am I paying state income tax? Am I not?
Optimizing Tax Strategies with Professional Planning
00:06:00
Speaker
Uh, so as far as like the military specific, that's the big one. And then a lot of military turn out to be landlords. Like you, you bought a house, you used your VA loan, you, you know, you want to do the house hacking.
00:06:13
Speaker
And, uh, so now you have a state or a property in another state, you have tenants, you have income. How do you claim it? How do you claim it correctly? So that is another big piece. I, myself, I did, we did that. We were, we're looking to buy our fourth house. So we have, we have tenants in different States. Like ah i I understand how complicated it gets.
00:06:35
Speaker
And then fed fire. So there's, you know, ah for a brief time, I was a federal firefighter worked, worked with a lot of them. And so there's a lot of a lot of tax, especially this year, like you mentioned in the intro, 2025 is a very unique tax year.
00:06:51
Speaker
So it just, it worked well with my practice and then all of the the new changes in tax law. Awesome. Well, before we get into some of those planning points for 2025, first, I know um we always have to say nothing in this episode should be considered tax, legal, or investment advice, right? These are some big picture best practices that um apply to a lot of people.
00:07:21
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and But if anybody has questions about, you know, your your specific tax return, your your family's finances, you should reach out to your financial advisor, your tax advisor.
00:07:32
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um Secondly, before we get into those planning points, will you talk just a little bit about how our tax system actually works? excuse Yeah, so ah we have a progressive tax system in the U.S. And what that means is the more that you make, the more you will pay.
00:07:51
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And so while that's true with a flat tax system, ah we have different brackets. And so as you work your way up through those brackets, you will pay more.
00:08:02
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So I think the biggest confusing point is if when someone says, hey, you know, I got all this overtime, I made more money. i don't want to be pushed into a higher tax bracket. And so it's not that if you were pushed into a higher bracket, that affects all of your income. You have to work your way through and only the next dollar is
Thrift Savings Plan: Roth Conversions and Strategies
00:08:20
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taxed at that rate. So here's some just easy numbers. And these are not real tax brackets.
00:08:26
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But let's say you made $250 this year and the 10% tax bracket was 0 100. If you paid on that, you would pay next tax bracket was to and it was fifteen per percent you would pay fifteen dollars and then if you made that fifty dollars in over 200, let's say that tax bracket is 20%, well, you would pay $10 on that 50. So even though you're in in this scenario, let's say the 20% tax bracket, you are not paying 20% on all of that income.
00:09:03
Speaker
That that ah amounts to $35 total. And if you divide that by the 250 that made, 14% effective rate. it's a fourteen percent effective rate So that's a good illustration of your marginal rate would be the highest rate that your your last dollar is taxed at. In this, again, totally fictional scenario, that's 20%. So your marginal rate would be 20%.
00:09:25
Speaker
Your effective rate, which is how much you paid in tax versus how much you made, again, in this scenario, is 14%. So your effective rate is going to be lower than your marginal rate, and that's because you work your way through those brackets.
00:09:39
Speaker
Does that clarify the progressive tax system? Yeah, so that's a kind of a common misconception, right, that there are like tax cliffs where if you earn just a little too much, a little too much overtime or whatever it might be, that now all your income is bumped into the next tax bracket.
00:09:57
Speaker
But that's not true at all. It's just the if it's one dollar into the next tax bracket, it's just that one dollar being taxed at the higher right Yeah, and I got a lot of questions. so we hear about Sorry.
00:10:10
Speaker
No, go ahead. was say, got a lot of questions when ah after the shutdown because some people were like, I'm going to get this huge paycheck. I'm going to get taxed like crazy. And you're taxed at the same rate.
00:10:21
Speaker
it's It's not that, you hey, yeah, this paycheck is bigger. You're going to you know pay more in tax. It's just that it's all at once versus spread out over you know a month and a half. So another just like misconception that because you made a lot of money and in one month or whatever, that somehow it's going to dramatically affect your taxes and
Financial Planning for Military Members
00:10:40
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and it doesn't.
00:10:42
Speaker
Got it. And so when we hear about tax deductions and tax credits, how does that play into the the tax system? What's the difference there?
00:10:53
Speaker
So a a tax deduction only... is only ah Let's see, it's only equal to your tax bracket that it falls in.
00:11:05
Speaker
So if you are in the 22% tax bracket and you have a deduction, if you take that that's your benefit so it's it's significantly smaller A tax credit is a dollar for dollar amount that we are saying you paid in tax. So the most common one that our our listeners are probably going to have is the child tax credit.
00:11:35
Speaker
And so if you had a $3,000 tax liability and you got a $2,000 child tax credit, it is essentially as if you paid $2,000 tax.
00:11:48
Speaker
Got it. So yeah tax deductions are good. Tax credits are generally more good. more yeah If you had the option, ah yeah, credit accreit is is definitely because it it takes ah just a lot more money for a deduction to to get give you the same benefit. So like some of these overtimes deductions you're seeing that are, you know, $15,000, $18,000.
00:12:16
Speaker
And again, these numbers, they start out really big because an $18,000 deduction means that you you worked a lot of overtime and you have like a $40,000, $50,000 overtime amount you were paid. You get a third of that.
00:12:31
Speaker
That gets smaller. Then you take the deduction times your tax rate and that gets smaller. So is it a benefit? Absolutely. Is it the gigantic benefit that maybe we thought it was?
00:12:43
Speaker
No. But it's it's still obviously worth claiming. like no one you You don't have you know a patriotic duty to pay more in tax than than required. That's right. Yeah.
00:12:54
Speaker
Yeah. Tax avoidance. Yeah. It's good. That's a big difference than tax evasion. Tax avoidance is something everybody should should take advantage of, whatever rules apply to them. And I'm sure one you're hearing a lot about right now is this no tax on overtime tax deduction.
00:13:13
Speaker
What's that look like? So... ever and So this this is one of the new new
Maximizing Tax Deductions and Credits
00:13:20
Speaker
tax laws for 2025. it it It's, again, started out as kind of this big, where it said, hey, we're not going to tax tips. We're not going tax overtime.
00:13:28
Speaker
And what it when it got passed through Congress, there was some stipulations that were applied to it. And then, ah so we'll walk through those. And the first is that it needs to be FLSA, the Fair Labor Standard Act.
00:13:43
Speaker
It needs to be mandated by FLSA. So the example i always use is if you were a nurse and you worked in a hospital and you worked a holiday and they paid you double time, it's very generous for the hospital, but it's not required by FLSA.
00:14:00
Speaker
Therefore, it's not deductible. Now, the federal For our federal firefighters, you work, whatever your schedule is, you have some overtime that's built in.
00:14:12
Speaker
They pay you a premium for that overtime. They don't do it out of their kindness of their heart. They do it because it's mandated from FLSA. So in that regard, it is it should be deductible.
00:14:25
Speaker
Got it. And so we're talking strictly about civilian federal firefighters here, where an enlisted firefighter It doesn't really matter how many hours you work, right?
00:14:39
Speaker
No, no. the ah the The Air Force or Army, whoever you're, you know, they own you. you you You can't – you don't get any deduction. You're you're you're paid what you're paid. Your your largest benefit is going to be your tax-free, you know, your BAH, your BAS, anything else you get. Yeah. You know, you have access to other tax benefits, you know, if you're deployed and and you can put it in your savings, your SDP. Like, there are other tax benefits for our active duty folks, but as far as the overtime, like, you you don't get anything for for being active duty and working 144 hours a week or a pay period. Got it.
00:15:19
Speaker
But for all the military members who are married to somebody that's in a civilian job that might um work overtime, obviously a big planning point for this year.
00:15:31
Speaker
Or any, any yeah again, the federal firefighter, ah civilians, maybe you're a guard or reservist who works ah on the civilian side. and and know 2025 is kind of unique because your qualified overtime or you know the premium portion is is the language that and that you're seeing used, the the half part of time and a half, may or may not be reported for you.
Avoiding Common Tax Mistakes for Service Members
00:16:00
Speaker
And so what are you seeing you know specifically on the the federal firefighter side? what What needs to happen to ensure a federal firefighter gets the full tax deduction that they're entitled to this year?
00:16:13
Speaker
So there's this and this it it sounds simple and it just it gets really complicated because of the the law and because of how things happened in 2025. So like you said, it's qualified over time.
00:16:27
Speaker
And so it is a the premium portion, the half of time and half, like you said. ah the I think what DFAS did was if you look at an LES, like a federal firefighter LES, you will see two things. You'll see OT in tour and you'll see overtime.
00:16:50
Speaker
I think what de defense did was however they were going to report overtime, they said, okay, anything that's logged as overtime, we will take one-third of that and put it in your December ah LES on the bottom.
00:17:05
Speaker
Because what I've seen is the firefighters who work, you know, extra shifts and they get paid their overtime, that number on the bottom of their December l LES that says, hey, this is your qualified overtime,
00:17:16
Speaker
That number is perfect to one third of the overtime that they worked for the for the overtime shifts they picked up. It's it it's perfect. It's one third. It's exactly what the law says.
00:17:28
Speaker
I think the issue is they didn't realize that federal firefighters work. And again, I'm i'm going on a.
00:17:38
Speaker
schedule, so 144 hours of pay period, that they work 38 hours of overtime. OT in tour, and that's what it says on the LAS, OT in tour, they didn't see that and say, hey, we need to calculate this.
00:17:52
Speaker
Now, the IRS s has said for 2025, it is optional for the employer to report it. So they don't have to report it.
00:18:06
Speaker
I think they're reporting it incorrectly because they only chose the overtime and not the OT and tour. Now, I'm going to stop there and say, aside from their reporting for federal firefighters, I've seen nurses, right, spouses of federal firefighters who are nurses.
00:18:23
Speaker
And sometimes they report it and sometimes they don't. And it's up to the taxpayer this year for 2025 calculate it. to calculate it Yeah, so it would be really easy for the the firefighter that gives their CPA or maybe they use some sort of DIY tax prep software, TurboTax, to enter the wrong amount or not be prompted to enter anything at all if they don't know that they've got to go back and do their own calculation, find out actually how much qualified over time they worked, right?
00:18:59
Speaker
Yeah, so for 2025, since it's still on the taxpayer, what I've recommended that my clients do is get every pay stub you can because it's hard to remember what you did in January of 25, February of 26.
00:19:13
Speaker
in february of twenty six Especially, hey you had a run that went long and you got your two you know your two hour minimum of of overtime because you stayed beyond roll call. ah Those things tend tend to you know we tend to forget.
00:19:28
Speaker
And so you can only get 12 months of pay stubs from my pay. So for the time, like for the clients who are back in January of 2025, trying to figure out, um you know, if they worked overtime or not, I've been telling them to go to whatever their, their reporting is like a taps for, for air force and look at your, see, Hey, was this reported? Did I work overtime?
00:19:54
Speaker
As far as 26, In 2026, it's supposed to be reported on the W-2. I don't know how it's going to report it. I don't know if it's going to be corrected.
00:20:05
Speaker
So i am I would recommend that starting now for 26, you start saving all of your pay stubs.
00:20:14
Speaker
So come tax season in 27, you can have every pay stub and you're not trying to backtrack and and log into ATAPs and figure out whether or not you're working overtime just here. I don't know what the DIY software is going to do. I don't know what the professional software is going to do. There's a lot of things in my software that I can override just because I know it's incorrect.
00:20:34
Speaker
I don't know what the DIY software will will allow you to do in 26, but it is all supposed to be reported. And I hope that DFAS figures out that, hey, this OT in tour qualifies. And let me tell you the reason My opinion, and I would defend this before the IRS, the reason they they included the overtime on the bottom of your l LES in December is because it is required by FLSA.
00:21:06
Speaker
It is the same requirement that you get OT in tour. It is required by FLSA 207 Section K. So I've gotten a lot of questions of, hey, ah I'm taking comp time.
00:21:19
Speaker
when I work my overtime. Hey, i'm um I didn't use my comp time. I got paid out my comp time at the end of the year. ah but Just a lot of questions about what is actually qualified overtime.
00:21:33
Speaker
And the two things that you need to look at is, were you paid a premium? And why were you paid a premium? So the comp time example, I work an overtime shift.
00:21:46
Speaker
I work 24 hours extra. The next pay period, I want to take the first day off. You know, my kid's got something. I want to be at home. When that's reported on your LES, you're going to see that.
00:22:00
Speaker
Comp time taken, and you weren't paid a premium. And that's an easy, okay, well, I wasn't paid a premium, so it's not deductible. If you were paid a premium, why were you paid a premium? So there's an example they used in IRS Notice 2025-69. And twenty five dash sixty nine and it was it was relevant to, I believe, a law enforcement officer under 207 Section O. Because it was, you had the option. Do you want cash or do you want overtime pay? It was like one of those. And it was totally not applicable.
00:22:36
Speaker
To what we do. And then people say, oh, well, you know, the comp time in this scenario that the IRS said, um you know, so I don't know if I can take my comp. It was not applicable.
00:22:48
Speaker
Federal firefighters are under 207K, not 207O any of the other ones. So it's important to look at why you were paid a premium and if you were paid a premium. Those are the two things you need to know.
00:23:03
Speaker
Hmm. So the the obviously the big takeaway here is don't assume your tax documents are going to get you the proper overtime deduction. It's part of the value of working with somebody like Matt um who understands this stuff. but But I've seen it commonly on the civilian side as well where maybe it's not reported at all on the W-2 and you've got to reference your pay stub if you're going to get it.
00:23:29
Speaker
or the wrong thing is reported on the W-2. So even ah a firefighter that works a the normal 24-on, 48-off schedule, there's similar in-tour overtime that you technically receive, you know, an FSLA or...
00:23:48
Speaker
FLSA required premium for, and it's not showing up on a lot of W-2s. So that's something you have to dig into ah yourself for 2025, and hopefully and employers will figure it out for 2026, but it's complicated. So I could easily see the number being reported for this year yeah being wrong just because of the unique rules that apply to firefighters.
00:24:16
Speaker
ah Man, so lots of things coming up that have an April 15th deadline. Things that that firefighters can do for last year um all the way up until ah the tax filing deadline. Will you talk to us about some of the different um deadlines that are coming up?
00:24:35
Speaker
So April 15th is the the tax day deadline. So it's it's a deadline. This is also a misconception. It's the deadline to file. So if if you file an extension and you push it to October 15th, that's fine. You can file October 15th. You still have to pay by April 15th.
00:24:57
Speaker
So it is not an extension to pay. It's an extension to file. So if you are expecting to owe, that money is due or you will be charged interest and a penalty. Just so we know what April 15th deadline is.
00:25:11
Speaker
The other thing you can do is you can still contribute to an IRA. And this is ah a point that I think gets confused for a lot of people because I'll ask my, hey, did you contribute to an IRA? An IRA is an individual retirement arrangement, commonly called an individual retirement account.
00:25:28
Speaker
It is totally separate from your TSP. And some people think, you know, oh, yeah, I contributed. ah You know, it comes out every month on on my pay stub. And the difference between an IRA and an employer-sponsored plan is the employer.
00:25:45
Speaker
So if you have a 401k at your job, if you have a 403b or TSP, which is the federal 401k, that is employer-sponsored. You can only do it with payroll deductions.
00:25:57
Speaker
um And it is tied to your employer. An IRA is individual. And so these are most commonly going to be at Schwab Fidelity Vanguard, right? The big three.
00:26:11
Speaker
So you can contribute. there's a There's a maximum. So for 2025, it was $7,000.
00:26:20
Speaker
You can contribute until April 15th. If you've already filed your taxes, it kind of becomes a headache for your tax preparer. because So if you if you haven't filed, you could so you can still contribute.
00:26:33
Speaker
um If you have already filed and you still want to contribute, tell your tax preparer. ah Because it there's some there's some things that need to happen. But um you have up until April 15th to contribute for 2025. And they make it real easy if you were, you know, again, Schwab, Fidelity, Vanguard. You go on there and say, hey, I want to contribute $7,000.
00:26:54
Speaker
It'll ask you which for 2026 or for 2025. So in theory, you could go today and contribute $7,000 for 2025. You can contribute $7,500 for 2026 in one day. seven thousand dollars for two thousand and twenty five you can contribute seventy five hundred for twenty twenty six in one day and I'm sure people have heard of traditional IRA versus a Roth IRA.
00:27:15
Speaker
What's the difference there? So, and again, this is all retirement accounts. You're going to have So the there's the account and then there's the character.
00:27:27
Speaker
And so the character would be traditional or Roth. it's It's not like a separate, like you don't have a separate Roth TSP and ah or or a separate 401k. It's all one account.
00:27:39
Speaker
It's just that the the pie for the characters is broken up differently. And so traditional means it's tax deferred. So we're kicking the tax can down the road.
00:27:50
Speaker
And then today we're going to lower our our taxable income. Roth means we are going to pay taxes today. we will not lower our taxable income, but that money will grow tax-free.
00:28:04
Speaker
So the gains, everything will grow tax-free. When you take it out, it does not affect your income. On the traditional side, since you didn't pay tax, all the growth plus whatever you put in will be taxed as ordinary income.
00:28:19
Speaker
And so there are benefits to both. um And there are disadvantages to both. And you really, like you need to figure out what makes sense for you. And the best way to do that is with the tax professional, with a financial planner, like a CFP, CHFC.
00:28:39
Speaker
um Aside from that, ah I guess I don't know. Do you want to like TSP introduced Roth conversions this year, which basically means you're going to take traditional money that you already put in there and convert it, which is a ah topic in and of itself.
00:28:55
Speaker
But the only thing I will say on that is like measure ah hundred times and do it once. Like the that can that can be very costly. So just work with your tax professional, work with your financial planner before you make that decision because you cannot undo that.
00:29:12
Speaker
It's a one-way street. That's a great point. I imagine you know everybody with the TSP got those emails recently saying that you can do a Roth conversion now. And like Matt's saying, that's electing to pay the tax on your traditional pre-tax money to convert it over to Roth.
00:29:32
Speaker
where it'll it'll grow tax-free, but that will be added to your income for whatever year you do it in. So if somebody has a $1,000 TSP and decides to convert the entire thing to Roth in one year, that's an extra $100,000 that gets added to your income.
00:29:52
Speaker
and might be taxed at a higher tax bracket than um is necessary. So that is that's a great point for anybody that's seen that and thinking about it. um It can make a lot of sense, but you should absolutely know what you're doing before you you initiate something like that.
00:30:10
Speaker
Here's a question for you, gentlemen. can you Can you decide to do a ah portion of that traditional conversion this year, next year? And could you plan it out over a series of years so you don't take the the big hit on your your total income and taxable income?
00:30:34
Speaker
You to take that one, Matt? Sure. Sure. Yeah.
00:30:39
Speaker
No, it's it's a good point. And so um the TSB has, ah has and and you can go read their stuff, so that they they allow you to do, I mean, it's like 20, I forget the number, it's like 25, 26 conversions in one year.
00:30:52
Speaker
um But the the way their rules are, and so let's say you have the short Sorry, the short answer is yes. You you can you can space it out. um But what what they've they've done is there's a $500 minimum on each like character of your TSP. so And they separate it by the one. So if you're BRS, you have a 1% agency match.
00:31:15
Speaker
Then you have the 4%. Or sorry, it the 1% agency auto, the 4% match, potentially CZTE, and then potentially traditional.
00:31:28
Speaker
And you have to you have to take $500 minimum of each of those, and they go pro rata, which just means proportional. And you have to convert all of it. But you also have to leave $500. So it it gets complicated pretty quick.
00:31:45
Speaker
And like if you were to work with a financial planner and you can plan out your retirement and you see, oh look, here's some dips, right? I have low taxable income in these years, you would kind of decide, hey, I want to I want to max out the top of my 22 percent bracket. I want to max out the top of my 24 percent bracket over these five years where my income is lower.
00:32:08
Speaker
That way you can again, the goal is to pay less tax. And so that's what we're trying to accomplish Let me ask you this then. Is it advantageous for military to take advantage of that time that they're in the military when they do have a low taxable income? Because as you'd mentioned, BAS, BAH, those type of incomes are not taxable, right? So I have a kind of a low taxable income. Should I take advantage of my time?
00:32:33
Speaker
If you do have traditional money and invested in the traditionals. Yeah. So and that and if i'm if I'm, you know, if we're traveling into territory where you're offering financial advice, you know, I don't know what, you know, I don't know if this is a minefield or not, but I'm just thinking kind of pragmatically for our military listeners. no that's ah That's a great example. And I think about the years where there might be a combat zone tax exclusion, right, where maybe you're the military member, your spouse also works.
00:33:04
Speaker
Normally you're in the, say, the 22% tax bracket, but you're deployed this year and your income's not going to be taxable. And so your family's in the 12% tax bracket.
00:33:16
Speaker
That would be like a textbook, you know, potential Roth conversion opportunity where normally every day you're paying taxes at 22% for the money you're working for.
00:33:28
Speaker
You can pay the tax at 12% and convert some pre-tax money to Roth. That might make a lot of sense. I think that's got to be an incredibly common planning point um for anybody with the TSP this year.
00:33:44
Speaker
Here's another, and I feel like I'm going down a rabbit hole with this Roth conversion thing. It seems to me... it the fact that it exists and that it's talked about and people are excited about, Oh, I get to do a Roth conversion, that it's more advantageous to, to have everything kind of invested through that Roth process, right? You'd mentioned that there's disadvantages and advantages to both.
00:34:08
Speaker
For the lay firefighter, the federal firefighter, the active duty service member, reserve service member, broadly speaking, I guess, what direction should I point my money if I'm i'm given these two options to invest with traditional or Roth in my TSP?
00:34:25
Speaker
So i I personally think, so i what so with the fire firefighter podcast, well let's tie back to firefighting. Imagine you're at the pump panel and you have only one discharge.
00:34:36
Speaker
it's the only thing you can turn off, turn off. That's it. If you put everything in your traditional, that is what you are doing. Now, if you had some in Roth and some in traditional, now you have options, right? Okay, well, I'm expecting, i have a big bill this year. Let's say i want to put I want to put a down payment on my second home in Florida.
00:34:56
Speaker
Well, I'm going to take that out of my Roth account because it's not going to increase my taxable income. You know, I can do whatever I want. The other option, and this is this is my my approach, is I want three options. I want to have a taxable account, I want a traditional account, and I want a Roth account.
00:35:12
Speaker
Because I want to be able to pull those levers whenever I want. If I have a really low income tax year, let's say I'm a single airman and I do deploy. Well, there's potential that not only am I a low tax bracket, I'm in a 0% long-term capital gains.
00:35:27
Speaker
So I can take that money that I put into Apple that I did on Robinhood, which I wouldn't recommend, but let's let's just let's call spade a spade, right? And I can take those gains 100% tax free.
00:35:39
Speaker
And so there are benefits to a taxable account. There are benefits to a traditional account and benefits to ah a Roth account. And so knowing how to pull those levers and when to do it is really the goal of tax planning.
00:35:54
Speaker
which Which is all the more reason to have an advisor such as yourself to and Chris to guide guide you through the complexities of this because, man, it can get complex and it's dependent on whether you're married, what point out you are in your career, how much you're making each year, whether or not it's overtime. So it's it's complicated even as you explain it. And I know that you're trying to help me understand it. It's it's still really tough to understand, but I appreciate you answering that question.
00:36:22
Speaker
yeah also the Yeah. Go ahead. I was just going to say that. So I think it's also important to to have the distinction between tax preparation and tax planning. Tax preparation is to correctly identify what you did last year and get it correctly. You know, marked on that tax return.
00:36:42
Speaker
Tax planning is forward-looking to say, hey, what are we expecting for the next year? What are we expecting for the next three years? And what can we do to minimize our taxes? Again, just ah just to have that distinction between tax prep. Like, if you come to me and say, hey, I want to do this. Like, I mean, at this point, we're only limited to what we can do and put money in an IRA, right? theres Things we can do until the April 15th deadline.
00:37:07
Speaker
It's kind of on the tax prep side. We're looking at what happened last year, right? Looking through the rear view mirror versus tax planning, looking through the windshield at how do you minimize your lifetime tax bill?
00:37:20
Speaker
And Matt Wilson, indeed to your point earlier about saving pre-tax or Roth, that is absolutely the number one thing I see on the retirement planning side with firefighters.
00:37:32
Speaker
or anybody earning a substantial pension is that they've saved pre-tax almost their whole career. Roth, you know, really became common in the last 10 years, it feels like, and in different types of retirement accounts.
00:37:47
Speaker
And so they've got a taxable pension. Maybe they've earned a Social Security benefit that'll be taxable because of their pension. And now all the money they've saved is taxable money.
00:38:01
Speaker
And so a lot of firefighters have no control of how they're taxed in retirement because it's all taxable. And so I love that that visual of being on the pump panel and having multiple levers to pull, multiple discharges of how to, different types of money that you can use to do whatever you need done, especially in retirement, because that truly is such a powerful thing.
00:38:26
Speaker
Yeah, so the i think I think Ross became an option in 94 in TSP. The other reason federal firefighters normally have a larger traditional balance is because when you retire before 59 and a half from federal service, you do not have a 10% penalty on your withdrawals because of your special category for for fire.
00:38:50
Speaker
So there are, again, advantages, disadvantages to everything. The big advantage for the traditional and the 401k for federal firefighters is that you don't have a 10% penalty. You unfortunately don't have access to take Roth money out until 59 a half.
00:39:08
Speaker
and And this, again, can really get into the weeds of how IRA contributions come out um from from Roth accounts. We won't get into it, but those those have different rules on how you take money out of a Roth IRA, which if if you're a federal firefighter can benefit you. like Again, like we said, having just different options.
00:39:33
Speaker
I'd like to ask you guys this, you know, because our audience is largely military and there's some civilian federal firefighters out there that are listening. But, you know, as a military member, through my experience, you kind of are overwhelmed with it. But you're told at the same time there are resources at your disposal to help you make these, you know, to answer these questions.
00:39:55
Speaker
Who should I be looking for? as an active duty military or federal firefighter in terms of, ah you had mentioned tax preparation and tax planning, and then then there's retirement planning and financial advising, if those are maybe the same thing in some some cases. So where do I invest my money? How do I prepare for retirement?
00:40:14
Speaker
where Where should I look for advice, i guess, is my question. So for active duty, you do have the option to go to, and I think they changed the name, the MNFR, the military family, airman family readiness center. I think it's military family readiness center now. um They have, um through they have... right, Space Force kind of being added in.
00:40:39
Speaker
Yeah. Yeah, so you can go go check them out and they have people you have access to. I think there's being in the, let's say, you know small business owner of the private space, I think there's always going to be demand for us because the people who work on base work base hours. So you can you know you don't have access to them on holidays, weekends. And I'm a small business owner. I am always working. So if you need something, you can always get a hold of me.
00:41:06
Speaker
But they're a free resource. Aside from that, on the tax side, there are there's a group called the Military Tax Experts Alliance, M-T-E-A. And that is a group I've met at conferences that I you know i communicate with on on different tax topics. All of them are great.
00:41:25
Speaker
And you can see which one you know fits your personality, which you should always do. Interview a few of them. On the advising side, um I would work with a CFP, CHFC. There's a group. um Also, there's a new designation called MQFP, a Military Qualified Financial Planner. It's now recognized by FINRA.
00:41:47
Speaker
um Paul Allen is the guy who who spearheaded that one, and there's great people in in that realm. So MQFP, CFP, those would be what I look for in advisor. You're going to pay them. of oh Typically, you're going pay them flat fee and you're only paying for advice. You're not paying them you know to manage money. Many of them will manage your money, but it's it's for a flat fee.
00:42:11
Speaker
So I think the biggest thing is is doing research, doing interviews, right? Don't just look someone up and and go with them. Like, make sure it's a good fit because you are going to talk to them about, like, a really deep financial what problems, potential. Like, there's there's a lot of very personal things that get involved with with your financial advisor and your your tax preparer. So I would i wouldn't just make sure it's a good fit personally.
00:42:38
Speaker
I appreciate you answering that. And ah Chris, I know I'm kind of getting outside of the scope of of the episode. I know we're talking taxes, but I just wanted to, you know, hit that target of opportunity because I know those are probably the questions that are coming up, um you know, beyond taxes. Like, gosh, this stuff sounds complicated. Who should I ask to help me? You know, so.
00:42:56
Speaker
yeah Man, and to foot stomp what Matt said, and the most bases have a personal financial counselor to Airman Family Readiness. And those are they're typically, they have some sort of financial designation or license where that's such a great starting point that I feel like people don't take advantage of.
00:43:15
Speaker
If you just need to know, am i getting the match in my TSP? Am I contributing enough to get all the free money if you're in the blended retirement system? Or, know, Is my TSP invested the way it should be?
00:43:28
Speaker
You know, they they can look at it and give you just kind of these basic um steps where maybe you don't need a you know, a full-blown advisor. You just need a kind of a roadmap to make sure you're doing the right things with your money. that ah They're absolutely an underutilized resource that I i highly recommend.
00:43:48
Speaker
Yeah, from what I remember during my time, it's it's almost sometimes guys, girls, they don't even realize that they're not making any contributions, right? I don't know how it's changed with the blended retirement. And Matt, I'm sure you could ah provide some insight because you joined the military in 21 and you kind of, you got into the blended retirement. But for us legacy guys with the high three,
00:44:07
Speaker
When I came in, if you weren't contributing to it you had to go and make um a deliberate action in my pay to, you know, make sure you contributed percentages. You could go five, six years or a long time without even, you know, making any contributions to your retirement account, which is a huge foul, you know. um I don't know if that still exists with the blended retirement.
00:44:26
Speaker
So every year the blended retirement system will default to 5%. And so you get a 1%. After two years, you get a 1% auto that they will contribute regardless of your contributions and 4% match. So it's it's a total of 5% total. It used to default to the G fund. It's not it now defaults to a lifecycle fund. And the lifecycle fund is it's it's TSP's version of a target date fund. And so say, hey, you came in in this year.
00:44:55
Speaker
Based on that, we think you're going to retire in this year. And we're going to slowly move that portfolio from aggressive to more conservative as you move through retirement. And so.
00:45:07
Speaker
um This is my personal opinion. There's nothing wrong with the Lifecycle Fund. I think after 20 years, it gets very conservative very quickly. But ah we've definitely moved moved beyond, hey, you're in the G Fund and you're not going to make any money, which was critical for for those who who were in prior. And that was the default. so Yeah, that was Yeah.
00:45:31
Speaker
three, four, three, four years of G fund as you know, a one C Wilson. Um, and then somebody was like, Hey, have you looked into this? Right. There was like G C S I, I can't remember. And you had to go and allocate percentages to each one of them. And like, which one, I don't know what any of this means, right? It's just a letter. What does that mean to me?
00:45:48
Speaker
Um, so it was important to get advice back then, but that's good to hear that they have the life cycle option. They didn't have that. um you know, with the traditional stuff. They didn't have that option. So that's good.
00:45:59
Speaker
So at least guys, even if they have no clue what's going on, something is going into the retirement account. Yeah. I think there's a lot of people who, you know, they they yeah They find fault. You know I think some people just like to complain, but they find fault with TSP. And I mean, could it be better? Sure.
00:46:16
Speaker
But what can't be better? Like, I think for for by and large, it serves it serves a great purpose. And I think it does ah a pretty good job of that. So, but I think a lot of financial advice is like there's there's plenty of resources and there's there's plenty plenty of bad information out there.
00:46:33
Speaker
But you're really limited to the best financial advisor in the firehouse. It's kind of like that's where you're going for your advice. And it's whoever's willing to be like, hey, come here. Like we're changing your TSP. You know, you get that NCO that wants to do that. And that's kind of the advice you have until until you you decide otherwise in your career.
00:46:55
Speaker
you know and I appreciate those NCOs, senior and NCOs that take that responsibility on and try to help because that's what they're trying to do. They're trying to help. But maybe don't just look at the Facebook group that tells you where to put your you know where to put your money, what fund of the TSP.
00:47:07
Speaker
Probably go to the Military Family Readiness Center. And if you don't have the means, money to be able to pay somebody to advise you, that resource is available to you. Matt, so kind of kind of moving back to tax-specific planning points, are there some other opportunities before April 15th? I know we we just covered um you know IRA contributions can still be made for 2025.
00:47:35
Speaker
What are some other things that are applicable here in the next couple months? Matt. ah The only thing um we forgot to mention or that I forgot to mention was a spousal IRA.
00:47:45
Speaker
So this is a spousal IRA is actually not like it's not a special account. You don't like open a spouse spousal IRA. That's just what it's called. um That's just what everyone calls it. But it is just a normal IRA. And what that does is it allows a spouse, let's say a spouse who isn't working and doesn't have earned income,
00:48:04
Speaker
You can contribute to an IRA with your spouse's earned income, provided there's enough. And for our military folks, there you absolutely should be. So as long as you have that amount, and you can you can put it into a spousal IRA the to the annual max, $20,000, $25,000, $7,000.
00:48:23
Speaker
and yeah Sorry, Chris, what is there something else? No. um What about um people may have heard of 529s? And i know this will vary state to state. some Some states, like Indiana, where I'm at, will allow a 529 contribution until April 15th. Others, it's the end of the calendar year. But what's a 529, and when would that make sense for 529?
00:48:48
Speaker
ah firefighter So 529 is a college savings plan for a minor. ah they They're unique in that they are operated by the state.
00:48:59
Speaker
And it's it's, again, one of those things that has a lot of nuance because you don't have to be a resident of the state to open up the account, nor do you have to plan to attend college in that state to open up the account. So you can be in Indiana, open up in Nevada 529, and your kid can go to school in Georgia.
00:49:19
Speaker
it's it's a weird It's a weird account, but the biggest benefit would be if your state of residence that has income tax has an account.
00:49:30
Speaker
um It has the potential to be triple tax advantaged in that you get a deduction on your state income tax. There's no federal benefit. Do you get a dedu deduction on your state income for 529 contributions?
00:49:43
Speaker
It grows tax deferred. So no tax on the growth. And then if you take it out for a qualified expense for education, um you can take it tax-free.
00:49:57
Speaker
So those are the – that's why we call a triple tax advantage. They're getting better since they were first introduced. And you can now use – I think it's like $12,000 a year for pre – for K-12. Like if if you needed that expense for, i don't know, whatever – School you were paying for, but for room and board, like there's there's tons of planning opportunities with 529s, especially once your kid's in college. And if they have scholarships, season GI Bill, there's definitely some ways to take some tax-free money out of those accounts.
00:50:29
Speaker
But again, they they are run by the state. And if you, again, i'm I'm a nerd, I like to read. So I use DoD MWR libraries all the time. If you go through the Morningstar Investor on DoD MWR libraries, you can get a good comparison by 529 by state.
00:50:48
Speaker
as Again, a free resource for active duty if you have a DOD ID, the Morningstar Investor through DOD MWR Libraries. But the 529 is one of, let's say, three accounts that are available for minors.
00:51:01
Speaker
New in 2025 is the Trump account. And so... there's some i There's some kinks they need to iron out because they they didn't put in a provision. So a contribution to a Trump account is ah a gift of future interest. And so you you actually have to file a gift return.
00:51:24
Speaker
They didn't make that exception. They did for 529s. I'm sure it'll get passed. But as it is today, um it's just a weird nuance with that one. But if your if your child was born after December 31st, 2024, then they are depositing $1,000. They're supposed to deposit sometime this summer a free $1,000 that will grow tax-free. So that's a Trump account.
00:51:49
Speaker
There's a 529 account for minors. The other account for minors is a UTMA, or ugma a un know Uniform Gift to Minors Act or a Unified Transfer to Minors account.
00:52:02
Speaker
um And those are essentially a taxable account that is the minor's money but managed by an adult.
00:52:14
Speaker
So if I open up up one for you know my daughters, I put money in there. It's technically their money. The gift is is done. And then I manage it until the age of majority. So it depends on the state.
00:52:26
Speaker
It could be 18. It could be 21. Again, everything has an advantage and a disadvantage. One of the big disadvantages to that is it's it's theirs. And so at 21 or 18, depending on your state, depending on how much money do you put in, your 18-year-old now has 15, 20 grand. And you're like, I know what I would do with 20 grand at 18, and I don't think it would be good financial decisions.
00:52:53
Speaker
Actually, that's a perfect segue to the other thing I want to cover is vehicle interest deduction, another thing that's new. um And unfortunately, maybe the most applicable thing for our military audience, everybody that's getting ready to graduate tech school and go buy a brand new Camaro, listen up.
00:53:13
Speaker
Because this may apply to you, but. You shouldn't do that. You should go buy the 2010 Toyota that's going to last forever um and just not pay any interest. But something that's ah that's new, vehicle interest deduction.
00:53:27
Speaker
Yeah, so another new another new deduction from the one big beautiful bill, and this is vehicle loan interest. So it has to be a new vehicle. So not a new loan, but a new vehicle. So if you take out a new loan on 2023, it doesn't count.
00:53:43
Speaker
So a new vehicle, a new loan, with the vehicle has to have final assembly in the U.S., and so you have to look up the VIN to see where the final assembly was complete.
00:53:55
Speaker
But if that's the case, then the interest you paid, um that will flow to the new Schedule 1A, which is where the no tips no tax on tips, the no tax on...
00:54:05
Speaker
So overtime and then the no tax on vehicle interest, in addition to the extra senior deduction, they all go on schedule 1A and flow to your 1040. so But some some pretty big nuances, like I've had some clients who who have filled it out like, oh, yeah, I got a new loan. like Well, it's not a new car, so it doesn't count.
00:54:25
Speaker
Got it. So, again, everybody graduating tech school, don't go off base and pay 19% interest on a vehicle, a new vehicle, because you can deduct it.
00:54:38
Speaker
oh But that is a new rule, so. But deduction, fall it's not a credit. So, deduction, not a credit. So, even if you pay, you know, $16,000 in interest, you're like, well, if you're in the 12% tax bracket, like, there's no reason to pay 19% interest to save $100, you know, like,
00:54:55
Speaker
Matt, I had a question on the 529. So the way i have 529 account for my my children, but the way that was explained to me is that you can use it for yourself for educational needs potentially if, let's just say, your children don't decide not to pursue anything and you're a 60-year-old with kids out of the house and have this money.
00:55:20
Speaker
Is that true? So it would depend, I think, on the age gap because ah i think the generation gap is is is still pretty big. um It should be possible.
00:55:33
Speaker
Most people don't – most people won't open them up for themselves because there's no growth. Like if you need to pay for college because you wanted to go back to college, like putting money in to just take it out, there's no growth. So there's no benefit to open up a 529 account for yourself.
00:55:47
Speaker
if If it's your kid's money and they're not going to use it, you do have the option to roll it into a Roth IRA account. Up to $35,000. It's capped at the annual limit. So for 2026, $7,500, you could do $35,000 total and put it into a Roth IRA and still, you know, kick that.
00:56:07
Speaker
Well, we now kick that tax can down the road. We roll it over to a Roth and now we, you know, we're going to forego any tax liability. But it would depend on on your age and your kid's age, but you you should be able to, yes.
00:56:20
Speaker
Yeah. Talk to your tax person. Talk to your financial advisor. Yeah, that's the ah the footnote for every single point made, right? Yeah. Yeah, go to the professional, ask them. You guys are professionals, of course, but you know you need to go out and hire your own if if you want to get this kind of advice. But I figured I'd take the opportunity, you know take advantage of the time with you guys.
00:56:41
Speaker
um Chris, did you have any other questions? I'm sorry. And I was going to chime in on the 529. Something that I see get missed a lot is people are will pay for private school or for college and just write a check to the institution.
00:56:57
Speaker
Where in Indiana, it's it's a pretty big benefit where you get a ah tax credit. It's 20% on up to $7,500, so that's a $1,500 tax credit you could get in any year by contributing to a 529. Again, every state's different, but for somebody that's paying for private school, if you can plop it in the 529 and send it to the school the very next day, you don't get the benefit of the growth like Matt said, but you do get that state tax credit or that state tax deduction for that year.
00:57:32
Speaker
um And I see a lot of people leave money on the table because they don't know to just plop it in the 529 and then send it to the school. Matt, there was one thing written down. i don't know that we hit it.
00:57:43
Speaker
And I think it's a good way to one of the last points we can hit for this conversation is the most common mistakes, biggest mistakes that you see from service members or federal firefighters. You know, i went I went back and forth on this, on on what what I was actually thinking would be the most common mistake.
00:58:00
Speaker
And i think I think I have two. One, from a financial planning perspective. I think that most, I think it starts when you're in the military and you get out of tech school and you you probably get a loan you can't afford.
00:58:15
Speaker
And the banks in the business are making money and they see your income is pretty steady. And you get used to that. and you're like, yeah, I'm like, i I work for the government. Like, this is this is easy. i don't need ah I don't need an emergency fund.
00:58:29
Speaker
And I know a lot of people who live this way. And they don't they just don't want to, my paycheck, to I'm going to get it, like, regardless. I'm in the military. And when you start to build those, I think, bad habits, it then you see it on the other side in the federal service. Guys who don't have enough save.
00:58:47
Speaker
Most Americans can't cover a $300 emergency and 40% of America isn't invested in the stock market.
00:58:55
Speaker
Well, we've already seen the longest federal government shutdown this year. You know, the military got paid, but that's not always the case. The shutdown in 2018 and 2019, the military did not get paid.
00:59:06
Speaker
I think we've gotten too comfortable with the fact that we've worked for the federal government, whether active duty or, you know, federal service, and that it sometimes breeds bad financial habits.
00:59:19
Speaker
that's mine That's my financial planning perspective on on on bad habits. um What great advice is that? Like you said, as of late, that's it's been a commonplace. in it It's probably going to continue, I would say, because we're in such a um politically volatile time.
00:59:39
Speaker
This isn't going to be the last shutdown that we see, you know, and and having that emergency savings because what was the last one, 47 days, something like that? um and And they bailed us out a couple times, military specifically, active duty military.
00:59:54
Speaker
um But that could not always be true. and how you going your mortgage and your loans and for food and et cetera, et cetera. Man, emergency savings is so important. And it goes quick too. You don't realize how much money you spend until it's not flowing in anymore.
01:00:08
Speaker
Yeah. And again, what are what are we doing? Because if we don't have that emergency fund, are we now going to have to take a TSP loan? Are we pulling Roth contributions tax-free so we're not increasing our income? But if you take contributions from your Roth IRA, you don't get to put them back.
01:00:24
Speaker
That's it. So if I take my contributions from 2023, can't replace them. Again, having those different accounts, well, if even if I have a taxable account, I may have some capital gains, but at least, you know, I don't have to i don't have to withdraw from the TSP. So i getting those bad habits, I think, is is just part of...
01:00:45
Speaker
I don't think it needs to be, but I think it's just it's part of the the reality that that we see every day. That's the financial planning one. As far as tax, I think too many people wait too long to come to a tax professional.
01:00:59
Speaker
I know that's coming from a tax professional, but... If I have to go correct a a bunch of returns, like it's it's going to cost you more money. And if you would have done it up front, getting depreciation correct on a rental, you know, paying state income tax when you didn't need to.
01:01:15
Speaker
I know there's free DIY software. And for most people, if you have a brutally simple situation, it's it's it's plenty fine. I'm not saying that everybody needs a tax professional. That's not what I'm saying. But I think the people who have a more complicated situation tend to wait too long.
01:01:30
Speaker
That's good. Well, man, to kind of wrap this up for anybody that, um you know, is in that that boat where they they have a more complicated tax return, they're trying to figure out their no tax on overtime and they want to reach out to you, what's the best way to do that?
01:01:46
Speaker
ah through Through my website, so Just fill out a contact.
01:01:57
Speaker
You can email me, Matthew, at StellarWM.com, or fill out a form online, but those those are the best ways to get a hold me. I'm on a computer a lot, just doing tax returns all day, so I should should reply. My goal is always 24 hours, so...
01:02:12
Speaker
so Man, when I heard first heard that and this is no disrespect, it it reminded me of ah Stratton and Oakmont from Wolf of Wall Street. It's a strong name, Stellar Wealth Management. ah can Can I real quick ask the scope of of what you do handle? For those of us, to include me, who don't understand the different acronyms that come after your name and your email signature block, like what is the scope of what Stellar Wealth handles? that Can they handle tax planning, tax...
01:02:44
Speaker
preparing and financial advising, you know what i mean So at this stage, I don't do financial planning because um you have to register with the state and it involves giving investment advice. I do not give investment advice, even though I have the designations to because my wife's still active duty and we're PCSing. I'm not going to register and deregister with a bunch of states.
01:03:06
Speaker
The enrolled agent is federally recognized, and so I've decided that I'm going to focus on tax. So tax advice, tax planning, tax prep. Like if if you think, hey, I think i'm going to sell my house next year. I want to look at what my capital gains are going to be. you Do some tax planning in that regard.
01:03:24
Speaker
In addition, um it would be representation. So if you get a letter from the IRS and say, hey, we want to look at this tax year, I can i can communicate ah with the IRS on your behalf and find some resolution, hopefully where you're not paying, but potentially, you know, figuring out an installment agreement or something like that.
01:03:46
Speaker
But tax-focused, For financial planning, for investment advice, you're going to have to go to one of those those other um designations like we talked about, a CFP, MQFP, CHFC.
01:03:59
Speaker
I mean, there's so many. and What's an investment advisor? What's a fiduciary? it gets It gets jumbled and it's very confusing. um But, I mean, at the end of the day, if you're looking for someone, I think the best thing you can do is ask them how they get paid.
01:04:15
Speaker
Excellent. And one last thing, man, I just kind of want to give the listeners an action item. We talked about overtime and no tax on overtime. What if they missed it? If I'm, if I'm working a lot of overtime and it's a confusing year and they just wrote these new laws and they haven't caught up, your employer may have not caught up on how they track that. What do they need to do? Do they need to go print or keep track of every pay stub month to month?
01:04:39
Speaker
Is that the only thing they need to do? That's the best thing you can do ah because people get promoted, you know, people work extra shifts. And the best way to do is to look every single pay stub for 2025 and see, like, add it up.
01:04:53
Speaker
How much did I work? That is the best thing you can do to make sure that you don't miss any sort of deduction that that you can you can take. I appreciate that. And Chris, that's that's all I had, brother.
01:05:06
Speaker
Man, so some some great actionable planning points in this episode. Matt, we appreciate you coming on and ah dropping some knowledge on us.
01:05:17
Speaker
And we're going to try to get this out in a timely manner just because of how how applicable it is to firefighters, military, and DOD civilian right now. So...
01:05:29
Speaker
Thank you for listening to this episode of the Fire Dog Podcast. If you found value in today's conversation, please take a moment to rate and review the show on your podcast platform of choice. It's one of the best ways to help us reach more firefighters and leaders across the service. This episode was supported by Roll Call Coins, telling the story of fire departments and teams through premium custom challenge coins. Learn more at rollcallcoins.com.
01:05:50
Speaker
It was also supported by AOS Services, helping fire departments stay mission ready with worldwide firefighting equipment compliance. Find out more at aosservicesinc.com. You can find more episodes at firedog.us wherever you listen to podcasts and be sure to follow us on Facebook, Instagram, and LinkedIn at the Fire Dog Podcast. That is the Fire DAWG Podcast.
01:06:09
Speaker
Sharing this episode with a friend or coworker or someone in the firehouse helps these conversations reach the people who would benefit most. This is Matt Wilson with Chris Boikley and guest Matt Stelmachek.
01:06:20
Speaker
Until next time, stay safe.