Q. I am a federal employee and will retire Jan. 3. I will have about 400 hours of Annual Leave for a cash payout. Am I allowed to request that this monetary amount be directly rolled into an eligible 401K plan and not have any taxes taken out? If I take the cash payout, can I predetermine the tax percentage based on my calculations or does the government tax at the maximum rate?
A. You may not direct the payout into an IRA or 401k plan. Taxes will be withheld according to the W-4 you have on file with your payroll office.