Source
r/govfire•
iaalaughlin

TSP - Tax exempt Contributions

TSP/401k

Looking at the new UI, and trying to figure things out about how I should be tracking tax exempt contributions.

Example numbers here.

Traditional Balance $70k

Tax-exempt balance $16k

Roth balance $14k

Total balance $100k

Tax exempt contributions are $7k, and Roth contributions are $6k.

According to [Page 3 of the summary[(https://www.va.gov/files/2022-03/TSP%20Summary.pdf), the tax exempt contributions are never taxed, but the earnings are. I also know that any payments are done proportionally from traditional balances and tax exempt balances.

If I'm trying to track my Roth/Traditional split, should I be adding the Roth balance + the tax exempt contributions?

Or am I looking at this completely wrong?

Posted Jun 3, 2022, 12:49 PM UTC

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[deleted]

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Bikesandkittens•

I don’t know man, but the UI is all sorts of jacked up. It took me two days to find my CZTE contributions. Going to try and roll them out to an IRA. I’ll probably have to call to get the right info, or look at my last statement which has the info.

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iaalaughlinOP•

It is definitely jacked up. I had two different account balances on the same page. One was from today, I think, and one was from yesterday.

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Aicilia•

Maybe you can check from your W2's?

Oops, sorry, misread the question

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TheTopGeekFIFEDERAL•

Your traditional TSP contributions were contributed pre-tax, and will be taxed upon withdrawal just like the earnings. So you really only need to track your Roth TSP contributions.

Note that if you leave in a Roth TSP, you can access only at age 59 1/2 without 10% penalty on earnings. Withdrawals are also always considered an equal portion of contributions/earnings. However if you roll over to Roth IRA, withdrawals are considered to always be contributions until they are fully consumed. Note your Roth IRA must be open for 5 years before you can make penalty-free withdrawals.

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iaalaughlinOP•

I have traditional contributions that were done from tax-free dollars, which is the issue.

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TheTopGeekFIFEDERAL•

How were the tax-free dollars contributed? Were they a rollover from another 401k? My understanding is that all traditional TSP contributions are pre-tax dollars, up to the IRS limit, and the plan does not allow for after-tax contributions to traditional accounts. Only Roth TSP (to my knowledge) would allow for after-tax contributions.

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TheTopGeekFIFEDERAL•

I stand corrected - I Read the PDF you referred to (pg3) and looks like this may be a special case. If you were in a tax exempt zone for these earnings, they may be treated like Roth but I would certainly keep tight documentation… would not be surprised if the IRS taxes them like everything else and makes your prove they were tax exempt.

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