TSP and taxes


Q. I read a question regarding TSP. You stated that if the TSP is used for purchasing a home, the money would be taxed.  In other words, they are telling you how to spend your hard-earned money. I would like to think that I could spend my money any way I desired. Please tell me if there are restrictions on how to spend my money?

A.  All money that is withdrawn from the the TSP is taxed as ordinary income.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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