Make sure the service member’s tax return is also available. Some military pay (e.g. BAH, BAS, combat pay, qualified hazardous duty, etc.) is not taxable. See Field 33 – Federal Income Tax Withholding Field on the LES will show the income that is taxed. It is important to review both the LES and tax return together to ensure an accurate picture of the person’s income.
If the member is not receiving BAH or BAS, then it is likely the member is living on base and this in-kind support should be imputed when calculating gross income.
Some allotments are voluntary (e.g. savings bond) and are not deducted from the gross income as a mandatory deduction.
Gross income (all taxable income) minus taxes and mandatory withholdings equals net income.
“True” Net Income equals net income (from above) plus nontaxable income (e.g. BAH and BAS).