Browsing: Tax

Q. I plan on retiring September 2020 with over 41 years of service. What states don’t tax a U.S. Postal Service pension, if any, or what states tax the least? A. Take a look at Alabama, Alaska, Florida, Hawaii, Illinois, Mississippi, Nevada, New Hampshire, Pennsylvania, South Dakota, Tennessee, Texas, Washington and Wyoming.

Q. I am 60. I retired from the Federal Aviation Administration (air traffic controller) at 56. At that time, I set up the “Substantially Equal Payments” under the 72 t. That arrangement ends this September (5 years). In 2015, Congress passed the “Defending Public Safety Employees’ Retirement Act.” Will this allow me to take a disbursement in addition to my ongoing “Substantially Equal Payments” without the additional 10 percent tax? My financial adviser believes that by taking other disbursements, even given the 72 t (10), will trigger the penalty because it would make the “Substantially Equal Payments” different. A. Generally,…

Q. I am a FERS employee age 47 with 27 years of service. I am currently on FMLA and will be resigning and applying for medical disability retirement. I know I can withdraw from my TSP but am not clear on the annuity option tax penalty. I want to withdraw funds to sustain me while waiting for a decision on my disability retirement. A. If you receive a TSP distribution before you reach age  59 ½, in addition to the regular income tax, you may have to pay an early withdrawal penalty tax equal to 10 percent of any taxable…

Q. I retired from the federal government (Department of Veterans Affairs) on Jan 31, 2018. I did 32 years and retired at 56. I withdraw all my TSP funds and, of course, federal tax was taken out. When I file my 2018 taxes, do I pay the NYS/city taxes? I don’t have enough to itemize.

Q. I am currently employed as a full-time career Senior Executive with 24 years of service and two years additional military service. In December 2018, I turned 70 years old; I’ll reach the 70 ½ mark in three months, in June 2019. According to the TSP document “Withdrawing Your TSP Account After Leaving Federal Service” {p 3, Limitations on Leaving your money in the TSP}, I don’t have to withdraw funds until April 1 of the year following the year I retire. However, I will be subject to the RMD because of my age. Because of the tax implications, I plan to…

Q. I separated from the U.S. Air Force on 12/31/2015 at the age of 53. I had a Uniformed Services TSP during the duration I was in the Air Force. On 01/01/2016 I took a job at the same overseas base and received a civilian TSP at that time. I worked that job until 12/31/2017 and left federal employee for full retirement at the age of 55. I am trying to find out if both the Uniformed Services TSP and the civilian TSP would be exempt from the 10 percent early withdrawal penalty since I stayed in federal service until…

Q. I’m 55 and a civilian employee. I’m retired Air Force, with a bit in my military TSP and a growing amount in my civilian TSP. I’ve just started converting all of my future TSP contributions to go to Roth, for one main reason: I plan to retire at age 62, and we’re going to take a lump-sum distribution of my TSP to purchase a house (won’t be eligible for a mortgage). The TSP balance at the time will be about $400,000 or so (hopefully closer to $500,000). I estimate that roughly 40-50 percent of it will be Traditional, and the rest Roth.…

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