Browsing: Tax

Q. If I was to take a normal FERS retirement on Dec. 31, 2017, would the money I receive for unused annual leave be income for 2017 or 2018? Also if I have an outstanding TSP loan, would the unpaid balance be reported as taxable income for 2017 or 2018?

Q. I am a recent FERS retiree with 32 years of credited government service and retired at the minimum retirement age of 56 (I was born in 1959). I thought that I can withdraw my TSP at the MRA without incurring early withdrawal penalties. However, in reviewing my 2015 1099-R from TSP, box 7 indicates a (2), which I understand is an early distribution. Is this information correct?

Q. I retired from the Federal Bureau of Prisons on November 28,2014. I withdrew a part of my TSP receiving it on February 17, 2015. When I received my 1099 it identified my distribution code as 1 -early premature distribution. Why is it not code 2-early distribution exception applies, since I am federal law enforcement?

Q. I am a federal employee contributing the maximum to TSP (Traditional). I currently own a Traditional IRA and a Roth IRA, and my wife owns a Roth IRA. As our combined income will soon exceed the threshold for the standard approach to contribute to our Roths, I am investigating strategies to utilize the back door approach to making Roth contributions. The fact I still have a traditional IRA is the issue — it is comprised of $12,000 of after-tax contributions, and $48,000 of pretax earning thus far. If I use the back door approach, I would have a large…

Q. I was terminated from my position with the Federal Bureau of Prisons (I later got my job back through arbitration), and I’ve withdrawn money from my TSP. I was forced to pay a 20 percent penalty and another 10 percent on top of that. I was told I may be able to get back the 20 percent because it was from a termination. Is this true? If so, how do I accomplish this?

Q. I recently submitted paperwork for a partial withdrawal of my TSP account (I am separated from federal service). I submitted this paperwork with guidance from a certified financial planner and after several phone calls to TSP. I wanted $240,000 rolled over into another retirement vehicle. TSP only sent them $112,000 — taxed the balance and sent me a check. When I called them they said their was nothing I could do now since the money had already been disbursed. I haven’t even received the check yet. What recourse do I have? I do not want to withdraw this money…

Q. I am retiring at the end of January 2016 with 32 years in the work force. I’m turning 55 in February 2016. Can I take a TSP loan out in January 2016, not pay it back, but pay the taxes? Does this still conserve my partial withdrawal option down the road? I was told I would have to take a partial withdrawal in the year I turn 55 to avoid the penalty, but if I do that, I eliminate the option later, and the amount I need would bump into a higher tax bracket. I’d ultimately like to take…

Q. What are tax and/or RMD consequences to a federal employee under FERS who is currently 70 1/2 years old and who does not plan to retire for 2-5 years, but is considering transferring a significant portion (three-quarters) of their TSP to a private insurance-company annuity? The annuity does qualify as an IRA. The federal employee does not plan to access the funds until retirement. Can the employee continue to work for federal government without taking an RMD or paying any taxes on the transfer?

Q. I am on CSRS,over 59 1/2 years old, and thinking of withdrawing my TSP and putting it in a personal account. If, for example, I have $50,000 to withdraw, and there is a 20% tax penalty, as I understand it, this means I receive $40,000. Now, is $50,000 added to my income for tax purposes, or is $40,000 added to it? If it is $50,000, can I include the 20 percent penalty as tax deducted from my income on my tax return?

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