Browsing: Tax

Q. I am retiring May 1. I want to pull some of my savings in TSP for a line of credit on my home to send my child through college (she graduates May 6) and to pay off the rest on my home so I will be secure as a single mom. I want to use the rest for an annuity. How much will taxes be for the withdrawal?

Correction: A previous version of this post misidentified the the tax-exemption characteristic of a Traditional IRA. This post has since been corrected to explain a Traditional IRA is not tax-exempt. Q. I’m retiring at 50 years of age after 22 years in federal law enforcement. I’m considering withdrawing all my TSP funds to a financial institution under a tax-exempt traditional IRA. I understand there’s no federal tax liability; however, I reside in the state of California. Is there a state tax liability for the withdrawal?

Q. I have recently retired from the U.S. Postal Service under CSRS. I had been contributing the maximum amount toward my TSP. When I left, I received my balance of annual leave in a lump payment. I am rolling my TSP over to a Fidelity account to have more choices with regard to withdrawal options. Since the money from annual leave pay is treated as earnings, can I place some of it in the IRA account?

Q. I am looking for a clear answer in regard to TSP home loans. I am considering retirement in the next year. I am eligible to retire today. If I utilize a TSP home loan now for my primary residence (and planned retirement residence) and retire before the loan is paid in full, will I be hit with a penalty? Can I utilize a one-time payout at time of retirement to pay the loan in full without incurring a penalty?

Q. I am 68 and plan to retire in two years from a civilian position with a district attorney’s office. I have a traditional IRA in a Vanguard account, which consists of both non-deductible and deductible contributions. I no longer contribute, and the IRS Form 8606 reflects a $99,000 non-deductible basis. I would like to move that portion to my Vanguard Roth IRA and direct transfer the remaining portion to my TSP account, mainly to take advantage of the G Fund. If I move the $99,000 to my Vanguard Roth IRA first and then request Vanguard move the rest to TSP, will…

Q. In 2016, I contributed $17,900 to my TSP and an additional $6,000 to my catch-up TSP. I had intended to contribute $18,000 to my primary TSP and $6,000 to my catch-up to max out my TSP, but I miscalculated. Will TSP/Employee Benefit Information System automatically transfer $100 from my catch-up contributions to meet the $18,000 requirement before catch-up contributions are made? Or do I have a tax problem to face?

Q. I plan to retire next year and am considering the transfer of my entire TSP into a tax-deferred IRA. Once I leave federal service, I will not be able to contribute to my TSP account any longer. If I make the transfer of my TSP into a tax-deferred IRA, can I still make contributions to the new IRA and reduce my taxable income in retirement? Or for tax purposes, would it be better for me to leave my TSP where it is and just withdraw an annuity directly from it?

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