Cashed out TSP


Q. I cashed out $12,000 from my TSP in 2011 and listed it on my tax return as income — and paid income tax on it. Now H&R block is saying I was supposed to pay a penalty on the withdrawal.

About five years ago, I cashed out about $10,0000 and don’t remember paying a penalty.

I called the IRS and they were clueless. I am 56 years old and don’t retire

for about four to five years. I am again contributing to my TSP.

Do you know if I was supposed to pay a penalty to the IRS?

A. If you took an early withdrawal and don’t meet one of the exceptions to the penalty, you’ll owe the penalty. If you don’t trust your tax preparer’s advice, you should find another tax preparer.


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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 and view his blog at

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