The TSP withdrawal options and how they are taxed 

NY Department of Taxation and Finance, Common questions and answers about pension subtraction adjustments: CSRS: (Civil Service Retirement System) - if the federal employee was hired before January 1, 1984, income from their Thrift Savings Plan is considered supplemental for which the exclusion is subject to the age and amount limitation to the extent it is included in their FAGI, not to exceed $20,000. FERS: (Federal Employee Retirement System) - if a federal employee was hired on or after January 1, 1984, income from their Thrift Savings Plan is fully excludable to the extent included in FAGI.

So to Mr Haws, TSP withdrawals for CSRS annuitants A are subject to taxation from the State of NY but up to $20,000 is tax exempt. Is that correct?

@@kenweiss6720 all I have is this. Not sure about CSRS. Please see: 1. www.tax.ny.gov/pdf/advisory_opinions/income/a17_1i.pdf “We conclude that the lump sum distribution attributable to contributions made by Petitioner and his employer to his TSP account while he was a Federal employee will be exempt from New York State income tax if the amounts are included in Petitioner’s Federal adjusted gross income (FAGI).“ 2. www.tax.ny.gov/pdf/advisory_opinions/income/a94_1i.pdf “Herein, with respect to Issue "1", where an employee is covered by FERS, the distributions received by such individual from such employee's TSP account are considered part of such individual's pension and may be allowed as a deduction from Federal adjusted gross income, pursuant to section 612(c)(3) of the Tax Law, to the extent includible in gross income for Federal income tax purposes.” 3. www.tax.ny.gov/pdf/advisory_opinions/income/a15_6i.pdf “We conclude that distributions that are attributable to contributions made by Petitioner and her employer to her TSP account while she was a Federal employee, including the accumulated earnings from those contributions, will be exempt from New York State income tax, if the amounts are included in Petitioner’s Federal adjusted gross income (FAGI).”

Hi what are some alternatives? I am leery of these financial advisors

Ira conversation first

That's a great question. When it comes to questions like this, it's hard to give a universal answer. The answer depends on your circumstances. The 20% withholding that you mentioned was the federal tax withholding, but the question still remains whether you owe more taxes. If you would like to have a one-on-one meeting with us to go over every detail, feel free to schedule an appointment with us: hawsfederaladvisors.com/work-with-us/

Yes, to all your questions.

Great question. You might want to do it about a month in advance.

Thank you for sharing!

How are you paying taxes twice? At the end of the year your total income and total taxes for year are calculated. If you paid too little you owe

Also... Everything in the G fund is a mistake! The G fund does not even cover inflation (and that is not coming from me, that is coming from the TSP folks). So if everything is in the G fund then you are losing money to inflation.

Why in G...

@@makaiokalahama I truly don't know what to do! Put it in other areas under TSP?? Plus, so hard to trust anyone. SMH

​@eMARie905 I know some say they put 60% in G fund, 40% in C fund.

That is why a loan is not a good idea, repayment is taxed twice.

@@stephendove2850 Definitely feels that way. I'll write to the TSP and see what their response is.

So don’t quote me on this, but I believe Roth IRA withdrawals are all tax free, because you already paid the taxes on the front end, so there’s no withholding once you withdraw your money at retirement, and there’s no RMD’s either, ever, as it’s one of the advantages of the Roth IRA over the Traditional IRA. I personally don’t believe that it’s much of an advantage or benefit, but some do! Cheers 🥂

Great question! We have several videos on that. Here is a great one: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-6ZVucZQNryA.html&ab_channel=HawsFederalAdvisors

Great question. Here is a good video that can help: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-Yo8qU3PDLwo.html&ab_channel=HawsFederalAdvisors

This is the scenario I'm in now. I was my father's beneficiary. And now I am trying to see if the initial 20% withholding is the extent of the taxes I'll need to pay on it.

@@MagaSaver2024 20% is essentially a guesstimate or "placeholder" federal tax withholding. You may actually owe more than or less than 20%. Avoid that automatic 20% tax on *_cash_* withdrawal by rolling TSP to inherited IRA.