Because so much of your take-home pay is not taxed during military service, most transitioning military and spouses find the change in tax bracket absolutely staggering. I'm hoping you will get used to it. Eventually. With a tax professional. And plenty of ibuprofen.
Still, there are taxes veterans never get used to -- invisible taxes you don't know about until you leave the military. Most are not real taxes levied by the federal, state or local government. These are the social and geographical factors that end up costing you a lot if you don't see them coming. The worst is the jerk tax.
The Jerk Tax
When I describe the jerk tax to my senior military transition clients, I don't use the word "jerk." I use a more descriptive word that also ends with a K. You get the picture.
If you have ever been a yeller, a thrower, a spitter, a sexual harasser, a mansplainer, a harsh critic, a workaholic, a felon, or -- worst of all -- a micromanager, you are probably going to pay a jerk tax in the outside world. No matter how good your results were in your military career, and no matter how much you achieved, when you are a jerk with jerk behaviors, people don't want to work with you.
How will employers know whether you are a jerk? At the executive level especially, it is common for the hiring manager to do some back-channeling with your past bosses and direct reports to find out about your professional reputation. If they happen to mention your jerk behavior, expect your job hunt to take longer and your paycheck to be a little less.
The Sunshine Tax
The sunshine tax is not a bad tax, really. It is the one tax that you might not mind paying, especially if you want to live in a certain location and no other. Expect the sunshine tax to be prevalent in places that are both sunshine-y and full of military folks like Hawaii; Virginia Beach; Jacksonville, Florida; and San Diego.
You might also pay a sunshine tax even without a lot of sunshine if you want to live in a heavily populated military zone after you separate from the military.
It is all about supply and demand. If there are a ton of E-7s and E-8s and O-5s and O-6s who want to keep their kids in school in your area, everyone is going to get paid a little less because there is more supply than demand. It might be worth it, though, if your family has put down roots.
The Procrastinator's Tax
Everyone tells you to start transition early, but there are a lot of reasons that people just do not get down to the work of transition. If you are among them, you sincerely have my pity. Sometimes life is bigger than our good intentions.
If you do not have six to nine months of savings built up, know that you might end up paying the procrastinator's tax when you are forced to accept a job you don't really want at a salary level below your potential.
Some companies are said to have a hiring model that takes advantage of the procrastinator. They wait until after a couple of missed paychecks when they know you must be feeling the pinch, then offer you the difference between your retirement pay and your last paycheck.
Avoid this tax by getting past your procrastination with our Veteran Employment Project video library featuring our FREE transition master classes today. More than 10,000 transitioning military and spouses use these insightful, step-by-step directions to land their next high-impact job.
The Leave Tax
A real tax you might even want to pay is on your unused leave. Should you sell back your leave and pay taxes on it or take terminal leave at the end of your service? Read our step-by-step directions about how to calculate the tax on leave for yourself the easy way so you don't have to lose any sleep over it.
The Poser Tax
Have you figured out how much you are worth on the civilian market? No? You are in good company. So often I run into transitioning military who do not want to do their homework on what their civilian income should be. I don't blame them at all. I hate to talk about money, too.
Money naturally provokes anxiety. But in the civilian world, most employers don't have a 2022 Pay Chart just posted on the internet for all to see. (Curse them!)
When you are in the initial phone interview with a screener, they are guaranteed to ask you about your salary expectations. You can't avoid the question with a careful phrase about how you want to know more about the job first. The screener needs an answer.
If you quote your uneducated guess, it is likely you will go too high and they will not be able to afford you and they will think you are a poser who has not done your homework. If you go too low, then you will be scrambling for more money when the job offer does arise and they will think you are a poser who has wasted everyone's time.
It is hard enough to get paid what you are worth in the outside world. Make sure you are doing what you can by avoiding these invisible social taxes and getting started on your transition now.
Jacey Eckhart is Military.com's transition master coach. She is a certified professional career coach and military sociologist who helps military members get their first civilian job by offering career-level Master Classes through our Veteran Employment Project and on her website SeniorMilitaryTransition.com. Reach her at Jacey.Eckhart@Monster.com.
Get Paid What You Are Worth
To get more tips on how to get the biggest paycheck ever, sign up for one of our FREE Military Transition Master Classes today. Our newest class is Next Level Negotiation: How to Get The Biggest Paycheck Ever. You can view previous classes in our video library. Questions for Jacey? Visit our Facebook page.