Private military company pay vs. Army pay

October 27, 2017 | Hiring Information

Professional Overseas Contractors

Although the United States isn’t a signatory to the U.N.’s “International Convention Against the Recruitment, Use, Financing and Training of Mercenaries,” the employees of private military companies aren’t mercenaries. PMCs supply support services and personnel whose jobs range from aircraft repair to medical and humanitarian aid. They also provide security guards who have parlayed their U.S. Army training into a job paying three to five times their Army pay.

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Private Military Company Pay

Private military companies are as hesitant about providing information about their payroll as they are about naming their clients. The individual contractors who worked for PMCs rarely speak of it because their clients include organizations such as the CIA, and their contracts require silence. Average pay ranges between $300 - $750 per day or between $9,000 and $22,500 per month.

Army Pay

U.S. Army pay depends on an individual’s rank. The higher the rank, the greater the responsibility and the corresponding pay. A private, entering advanced individual training earns $1,468 per month. A sergeant with five years experience, possibly including combat, earns a base pay of $2,448 per month. A master sergeant with 20 years of experience may be only 38 years old and earns $4,189 per month in base pay. An infantry officer, after five years of service, probably has combat leadership experience and -- if a first lieutenant -- earns $4,349 per month. If that same officer holds the rank of captain, he earns $4,952 per month in base pay.

Similarities

Because PMC personnel work outside the U.S., they can receive their pay through direct deposit to their bank in the same way Army personnel do. Some PMCs, such as those that provide aircraft maintenance, for example, don’t work in a combat-type situation. Instead, they may contract to foreign governments, where their personnel maintain the aircraft, both military and civil, belonging to the government.

Differences

PMCs don’t have the same duty schedules as the U.S. Army. Instead, the PMC tours of duty are based on their clients' requirements. For example, in Iraq, PMC contracts with the U.S. government may require that personnel leave the country after a period of several months. PMC personnel provide physical security for U.S. nonmilitary assets and personal security for U.S. government civilian personnel. Additionally, PMC personnel aren’t subject to military courts or orders and can resign their positions at any time, without repercussion.

Best Fit

The U.S. Army is the common starting point for career soldiers, both those who spend 20 years or more in the Army and those who become PMC field employees. If you prefer the more casual relationship and the higher pay that a PMC offers, you may be well suited to that work. On the other hand, if your paycheck is not an issue and you prefer the traditional military role the U.S. Army offers, stay in the Army.

New bill would give civilians in combat zones a tax break

May 16, 2017 | Hiring Information, OVERSEAS INTEL

Civilian federal employees serving in combat zones would receive the same tax credit available to military personnel who work alongside them, under a new bipartisan bill.

The Combat Zone Tax Parity Act (H.R. 4621) aims to address a shortage of civilian workers staffing dangerous regions by extending a federal income tax break to those employees. Civilian employees who opt for hazardous overseas duty often perform important jobs in fields such as transportation reconstruction and health care, but do not qualify for income tax exemptions on their base pay like active duty military personnel do. Most civilians working abroad in such areas are employees of the Defense and State departments, the intelligence community and the U.S. Agency for International Development.

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Your Pay: 4 things overseas contractors should know when filing taxes

January 23, 2017 | Hiring Information, OVERSEAS INTEL

What overseas taxpayers need to know this season. The 2016 tax filing season has officially begun, and the IRS is now accepting returns from U.S. taxpayers worldwide. For U.S. citizens living abroad, filing taxes this year presents a number of unique and unprecedented challenges. To get you started down the right path, here are four things to be aware of as you enter this year’s tax filing season.

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1) Hiding your head in the sand is an increasingly bad idea.

Given the millions of U.S. citizens living abroad and the significantly fewer number of tax returns filed by expats, it’s safe to assume that many of you who should be filing returns aren’t doing so. With each passing year, tax delinquency becomes a worse and worse idea, and 2016 is no different.

Since the enactment of the Foreign Account Tax Compliance Act (FATCA) in 2010, the IRS has made great strides in its global information-gathering capabilities. Toward the end of 2015, the U.S. signed several unprecedented international agreements regarding the digital exchange of information and began receiving massive amounts of overseas account information from FATCA partner countries. This could very well be the year your account information is sent to the audit-hungry IRS.

To make matters worse, aside from the onerous penalties associated with non-compliance, the IRS has added a new weapon this year for punishing tax-delinquent expats. Starting in 2016, if your tax delinquency reaches a $50,000 threshold (to be adjusted for inflation), you could potentially have your passport cancelled.

So if you haven’t been filing taxes, you should strongly consider one of the IRS’s amnesty programs. The friendlier of the programs, the Streamlined Procedures, offer non-willfully delinquent taxpayers the option to catch up with the IRS with limited penalties. When speaking recently about this program, IRS Commissioner John Koskinen suggested that the program will eventually be closed once the IRS determines that there’s no way a taxpayer who would want to participate couldn’t have heard about the process (rendering the taxpayer willfully delinquent by default).

2) Certain tax provisions have been adjusted for inflation.

Prior to each tax year, the IRS announces inflation adjustments for dozens of tax provisions, including the tax rate schedules, and other tax changes.

Of particular importance to U.S. expats, the following adjustments were announced for this season:

For the 2015 tax return, the maximum foreign earned income exclusion (“FEIE”) rises to $100,800. Married couples working abroad can exclude twice this amount from their joint income (i.e., $201,600).
The maximum foreign housing exclusion for the 2015 tax return rises to $14,112. Adjustments may vary from city to city and are based on the local cost of living.

3) The foreign tax credit, if available, is preferable for expat parents.

As an alternative to (and for higher income earners, in complement to) the FEIE and foreign housing exclusion, a U.S. expat can claim a foreign tax credit for foreign income taxes paid in order to reduce his or her taxable income.

Assuming sufficient credits are available (i.e., your creditable foreign tax exceeds your U.S. tax), U.S. expat parents should consider the foreign tax credit as the preferred alternative from now on, for the following reason: A new law specifies that taxpayers who utilize the FEIE cannot claim the child tax credit (which may be refundable up to an amount of $1,000 per child). This limitation does not apply, however, when the foreign tax credit is utilized. This new provision is effective beginning with the 2015 tax year.

4) Your filing deadlines are different.

Because April 15 falls on a Washington, D.C., holiday this year, the tax return deadline has been moved to Monday, April 18 for most filers. Expats should take into account that the shifted deadline also applies to international information forms that are normally due when the tax return is due. So, for instance, the deadline for the Form 3520 (relating to foreign trusts and gifts) is pushed to April 18 as well.

If you live outside the U.S. on April 18, you are entitled to an automatic extension (without the filing of an extension form) until June 15. If you owe tax, the extension applies only to the tax return filing and not the tax payment. You must still submit your payment by April 18 to avoid paying interest on your late payment (late payment penalties do not commence until June 15). You can also file an automatic extension to extend your deadline until October 17.

Hiring Information

Private military company pay vs. Army pay

New bill would give civilians in combat zones a tax break

Your Pay: 4 things overseas contractors should know when filing taxes

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