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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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Xavier12  
#1 Posted : Saturday, February 23, 2019 2:51:39 AM(UTC)
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I am a recently separated (disability retirement ) Federal employee who took out a TSP loan last year. I was unable to pay the loan back before my separation. I was penalized with a distribution on the loan dated 12-31-2018 and given a 1099-R to file my taxes. I recently filed my taxes and upon receiving some backpay upon separation and retirement went ahead and filed and paid my tax penalty.

My question is, was there and is there still a way for me to not have paid the tax penalty? I am reading that I can roll over the amount taxed into a employer 401K which I have as a part time employee in the private sector. Can I still do this? I am still within my 60 days of the 12-31-2018 but it’s close! My separation date was January 10th 2019 for what it’s worth.

Would I have to amend my taxes for this year? Confused.

Edited by user Saturday, February 23, 2019 2:55:59 AM(UTC)  | Reason: Not specified

roger.d  
#2 Posted : Saturday, February 23, 2019 8:58:17 PM(UTC)
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I am a DIY tax guy myself. For this, I would seek the assistance of a local tax professional.
Learn to discipline yourself, so someone else doesn't have to
thanks 1 user thanked roger.d for this useful post.
Xavier12 on 2/24/2019(UTC)
ex-military  
#3 Posted : Monday, February 25, 2019 4:47:34 AM(UTC)
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Originally Posted by: Xavier12 Go to Quoted Post
I am a recently separated (disability retirement ) Federal employee who took out a TSP loan last year. I was unable to pay the loan back before my separation. I was penalized with a distribution on the loan dated 12-31-2018 and given a 1099-R to file my taxes. I recently filed my taxes and upon receiving some backpay upon separation and retirement went ahead and filed and paid my tax penalty.

My question is, was there and is there still a way for me to not have paid the tax penalty? I am reading that I can roll over the amount taxed into a employer 401K which I have as a part time employee in the private sector. Can I still do this? I am still within my 60 days of the 12-31-2018 but it’s close! My separation date was January 10th 2019 for what it’s worth.

Would I have to amend my taxes for this year? Confused.


Something isn't adding up. How were you given a distribution for 2018, if your separation was in 2019? As I see it, the only way that happens is if you had already stopped paying on the loan somehow. If you were up to date on your payments at the time of separation, the distribution should have been for 2019.
Xavier12  
#4 Posted : Monday, February 25, 2019 6:53:07 AM(UTC)
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Ex military. I was behind on payments. Went broke waiting for the approval of my disabilty retirement and could not afford to pay 2 loan payments. Called them late 2018 and told them the situation and they said that they would send me a 1099R and make me take the distribution. Found out I was approved Early Jan 2019
ex-military  
#5 Posted : Monday, February 25, 2019 9:45:10 AM(UTC)
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Originally Posted by: Xavier12 Go to Quoted Post
Ex military. I was behind on payments. Went broke waiting for the approval of my disabilty retirement and could not afford to pay 2 loan payments. Called them late 2018 and told them the situation and they said that they would send me a 1099R and make me take the distribution. Found out I was approved Early Jan 2019


The problem is that they have already declared the distribution. Once the distribution is declared, the loan is closed. There is no way to go back and repay or reverse the distribution.
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