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?

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