Q: My husband, a federal Defense Department employee, keeps mentioning how the new health reform bill will cause us to have to pay tax on the FEHB premium (our portion and the portion the government pays?). I try to keep up with the new changes, but I really don’t know what he is talking about. Can you clarify? A: There are provisions in the law that will phase in increased costs on certain health care plans. As I understand it, these costs will be passed along in the premiums you pay.
Browsing: taxes
Q: If I retire at age of 56½ and elect to draw equal payments from my TSP, will this be considered earned income? A: It would be considered ordinary income, but not “earned income.”
Q: I loaned money from FERS in 2010. Must I claim this on my income tax return? A: I suspect your question is about the TSP, but it’s not clear. TSP loans are not reported on your tax return.
Q: Where isTSP’s Required Minimum Distribution reported on the Form 1040 Income Tax Return? A: Form 1040, Line 16.
Q: I am 53 years old, and I was a U.S. Postal Service employee with 20 years of service under the Federal Employees Retirement System. I took disability retirement from the USPS in March after suffering injuries in Iraq as a reservist. If I take a full withdrawal from my Thrift Savings Plan account, will I pay a penalty to TSP, and at what percentage? How much will I have to pay in taxes? Will the USPS match my TSP balance? And how long must my money stay in a TSP account before I can make a full withdrawal without…
Q: I recently retired from the federal government. If I take my money out of the Thrift Savings Plan in a lump sum, will I have to pay Social Security and Medicare taxes? A: No.
Q: I’m turning 70 in February, I contribute the maximum to my Thrift Savings Plan, and I plan to work for a few more years. Am I allowed to continue contributing to my TSP in 2011, or will I be penalized with my taxes because I will be turning 70 1/2 in August? Also, will I be matched for my contributions? A: Your eligibility to continue participating in the TSP, including any matching, will continue until you separate from federal service.
Q: I plan to retire from a federal law enforcement position at the end of February. I am covered under the Federal Employees Retirement System and will have an outstanding Thrift Savings Plan loan balance when I retire. I assume that there will be some type of “demand for payment” notice sent by TSP, and if I don’t repay the loan by a certain date, the balance will be considered a withdrawal. Will the TSP deduct the 10 percent penalty from my account, or will they bill me? Will the “withdrawal” be taxed along with my regular income on my…
Q: I am a Civil Service Retirement System retiree. What happens to my Thrift Savings Plan account after my death? My notes from a retirement seminar 10 years ago say that if my spouse is listed as my beneficiary, she may move my TSP funds into her individual retirement account with no tax or penalty. If my children are listed as beneficiaries they do not have the same option, and in most cases the TSP funds are fully taxable. Is this still correct? A: Your spouse may transfer the balance to an IRA and avoid current taxation or may, under…
Q. When we retire under federal law Enforcement and receive the Social Security Supplement under FERS, are Social Security and Medicare taxes withheld on our FERS annuity and supplement checks? A. No, they are not.