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TSP

Administered by the Federal Retirement Thrift Investment Board, this defined contribution plan for federal employees has roughly 4,614,874 participants, and over $358 billion in assets under management. Ask your TSP questions and post related topics here.

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EASyGoing  
#1 Posted : Monday, March 27, 2017 3:57:12 PM(UTC)
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What is the City?
"Start where you are. Use what you have. Do what you can." - Arthur Ashe
EASyGoing  
#2 Posted : Monday, March 27, 2017 4:17:00 PM(UTC)
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http://sidneyoh.com/tax-...come-tax-sidney-ohio.asp

Typically Traditional TSP is tax deferred (especially on the Federal level) but it appears your city doesn't want to wait till you retire to collect. Looks like the tax man in Sidney is correct.
"Start where you are. Use what you have. Do what you can." - Arthur Ashe
EASyGoing  
#3 Posted : Monday, March 27, 2017 4:49:36 PM(UTC)
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Originally Posted by: PostalEmp Go to Quoted Post
They are claiming they can do that, I am asking how they have the legal authority to tax it when the IRS says it's not taxable and the people at the TSP Hotline said they can't tax it. I am looking for something in writing that states this is tax exempt.


States have the legal authority to tax you how they want. Do not confuse Federal with State.
"Start where you are. Use what you have. Do what you can." - Arthur Ashe
EASyGoing  
#4 Posted : Monday, March 27, 2017 5:03:57 PM(UTC)
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Originally Posted by: PostalEmp Go to Quoted Post
So you're saying a state can legally tax money you have not received? That sounds ridiculous.


No that is not what I'm saying nor what Sydney, OH is saying. You are contributing your earned income into an account (which you can draw from later) and your taxman wants to collect taxes on it now (not later).

If you need further explanation, then contact your taxman:

Tax Administrator: Jeffery Wical
Phone: (937)498-8111
Fax: (937)498-8149
Email: jwical@sidneyoh.com


"Start where you are. Use what you have. Do what you can." - Arthur Ashe
PostalEmp  
#5 Posted : Monday, March 27, 2017 5:12:41 PM(UTC)
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Already spoken to them and his office is claiming they can tax money that I haven't received. I don't see how that is legal.
EASyGoing  
#6 Posted : Monday, March 27, 2017 5:21:16 PM(UTC)
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Originally Posted by: PostalEmp Go to Quoted Post
Already spoken to them and his office is claiming they can tax money that I haven't received. I don't see how that is legal.


While you don't physically have the money, you can withdraw it from TSP at any time. So technically, you have received it.
"Start where you are. Use what you have. Do what you can." - Arthur Ashe
TheRealOrange  
#7 Posted : Tuesday, March 28, 2017 7:34:09 AM(UTC)
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Originally Posted by: PostalEmp Go to Quoted Post
Already spoken to them and his office is claiming they can tax money that I haven't received. I don't see how that is legal.


They are not taxing money you haven't received; you received the income and elected to contribute a portion to the TSP. While that portion is not taxable under the federal income tax rules, the municipality is simply taxing your full income regardless of contributions to the TSP. They tax income that includes "Employee contributions to retirement plans & tax deferred annuity plans (including Sec. 401k, 403b, 457b, etc.)." If they do that, they are not permitted to tax withdrawals (at least not legally, as I understand). As an example, Pennsylvania does the same thing; i.e., it taxes employee contributions but not retiree withdrawals. So, in your instance, if you have salary income of $50,000 and contribute $5,000 to the TSP, the feds tax only $45,000, but the municipality taxes the full $50,000. There is nothing preventing that. When you withdraw funds, the feds will tax the withdrawal but the municipality shouldn't.

DaVinci95  
#8 Posted : Tuesday, March 28, 2017 9:35:08 AM(UTC)
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Originally Posted by: TheRealOrange Go to Quoted Post
Originally Posted by: PostalEmp Go to Quoted Post
Already spoken to them and his office is claiming they can tax money that I haven't received. I don't see how that is legal.


They are not taxing money you haven't received; you received the income and elected to contribute a portion to the TSP. While that portion is not taxable under the federal income tax rules, the municipality is simply taxing your full income regardless of contributions to the TSP. They tax income that includes "Employee contributions to retirement plans & tax deferred annuity plans (including Sec. 401k, 403b, 457b, etc.)." If they do that, they are not permitted to tax withdrawals (at least not legally, as I understand). As an example, Pennsylvania does the same thing; i.e., it taxes employee contributions but not retiree withdrawals. So, in your instance, if you have salary income of $50,000 and contribute $5,000 to the TSP, the feds tax only $45,000, but the municipality taxes the full $50,000. There is nothing preventing that. When you withdraw funds, the feds will tax the withdrawal but the municipality shouldn't.



Of course if you move when you retire, the new municipality might tax the withdrawals too. I'm not sure if you'd have any recourse since it isn't the same entity taxing you twice.
FatHappyCat  
#9 Posted : Tuesday, April 11, 2017 9:59:26 PM(UTC)

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Originally Posted by: PostalEmp Go to Quoted Post
Already spoken to them and his office is claiming they can tax money that I haven't received. I don't see how that is legal.


You have received it; you've elected to put it into your TSP.

It honestly looks like exactly like a Roth IRA. If you look at the non-taxable income, one of them is income from federally funded plan. So when your $100 becomes $500, the entire $600 should be tax-free = you win!
The HalfBreed  
#10 Posted : Thursday, April 13, 2017 7:48:14 PM(UTC)

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I grew up in Jersey, and have many relatives there....some work for the States of NJ and PA

What they tell me is that their contributions are taxed when they put $$$ into those accounts, but not when they take it out.
Suppose one worked for 20 yrs in a state that didn't tax it, then 20 in a state that does tax it (going into the account).

Commingled funds now ?
My daughter said she reports one income for taxes (higher) to NJ, while at the same time, she reports a lower income to the Feds...Same with my sister in PA (if she's telling me correctly)

Fortunately, I live in IL, and they don't tax it going in, nor do they tax it coming out.
Lucky Me, but the Feds are always there...with THEIR Hands out.

Edited by user Thursday, April 13, 2017 7:49:30 PM(UTC)  | Reason: Not specified

RETIRED 12/19/2012 !!! Good Bye Tension !!! Hello Pension !!!
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