Q. Can I take the 40 percent loss I take on my Social Security, because of windfall elimination, as a retirement investment loss on my federal income tax? A. No.
Browsing: taxes
Q. I am a Civil Service Retirement System employee with 33 years of service, and I plan to retire June 3. Can I roll my Thrift Savings Plan into the Voluntary Contribution Program before I retire, and will I be required to pay tax on that money? Can I later roll the VCP into an Individual Retirement Account, and is it best to go into a Roth or traditional IRA? A. You may not transfer your TSP money into the VCP.
Q. I am going through a divorce. My husband works for the federal government. If and when the account is split, can I take out partially or totally, the money in my account? If so, what percentage in taxes will I be required to pay? A. I suggest you review the material in the booklet at https://www.tsp.gov/PDF/formspubs/tspbk11.pdf.
Q. Last year, I took out $3,000 from my 401(k) and paid my 20 percent penalty. This year, I went to do my taxes and expected to pay the additional 10 percent penalty of $300. I do my taxes on freetaxusa.com, and my refund was supposed to be $1,800 after I entered my W-2. But as soon as I entered my $3,000 distribution, it knocked it down to $1,300. I have no other factors involved as far as why I would be charged more than the initial $300 I expected. Do you think there is something wrong and they are…
Q. I am a Federal Employees Retirement System employee and a reservist. I have a uniformed service Thrift Savings Plan account and would like to use some of the money to buy in to my FERS annuity. Does the FERS annuity qualify as a tax-deferred retirement plan, or will I have to pay taxes on the money? A. You’ll have to pay taxes on the money.
Q. When I hope to retire in FERS, I will be 62 years old with 28 years creditable service. I will receive TSP payouts, Social Security benefits and a FERS pension. My wife will benefit from Survivors’ Benefits. I’m concerned about what the living costs will be as a retiree. Will I have to pay federal income taxes on all of the above income that I receive. I am told that the tax rate is cheaper after retirement. Is that just because there is less income, or is it also because we are in a lower tax bracket? A. All…
Q. I recently donated annual leave for a fellow postal worker who has been injured. Is the value of this donation tax deductible? A. This is really a question for your tax preparer or a CPA, but I doubt that it would be deductible since it has not yet been taxed as income.
Q: Are monthly payments taxed? Is there any way to get around paying so many taxes on your TSP withdrawals? A: Your TSP withdrawals, unless they are rolled over, are taxable as ordinary income.
Q. I will be retiring in 2012 and must also take a required minimum distribution from my TSP in 2012. I would like to do a partial withdrawal in the amount of the RMD prior to the date I retire, to be followed by monthly payments upon retirement. My question is whether I can rollover the RMD into a Roth IRA, so that I would be paying income tax on the Roth IRA withdrawals as the withdrawals are being done, rather than on the entire amount of the RMD. If I read the TSP material correctly, it appears that this…
Q. Is there a way to withdraw money from my 401k or TSP without paying a tax penalty, in order to use the money to pay for college tuition for a child? A. The rules are complex, but there are ways around the early withdrawal penalty. Read the notice at the following link for more information: https://www.tsp.gov/PDF/formspubs/octax92-32.pdf. Pay particular attention to the left side of Page 4.