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Glen

Thrift Savings Plan And 457?

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Hello,

 

I’m a noob and this is my first post so please be kind :) I work for the government and currently max out my TSP for the $15,500. My first question is can I still contribute to either a 403(b) and/or 457 and have it lower my taxes? My AGI for this year (married filing jointly) is $164,000.

My second question is a complicated one (at least for me) I started a ROTH in 2006 and funded it with $4000. I then continued funding it in 2007 for $4000 and just put $5000 in for 2008. Well low and behold I make too much money for a Roth (something the Vanguard Salesperson neglected to inform me of) Now I'm trying to do the taxes with the Turbo Tax and it talks about penalties and recharacterization, etc. My AGI for 2006 was 151,900 and for 2007 as listed above was 164,000. Is there any auto calculators to tell me what I need to move out to a Traditional IRA. I don’t quite get the phase out things.

 

Any help would be greatly appreciated. Thank You.

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"I work for the government and currently max out my TSP for the $15,500. My first question is can I still contribute to either a 403(b) and/or 457 and have it lower my taxes? My AGI for this year (married filing jointly) is $164,000."

I do not claim to be an expert regarding the TSP, so take this as nonexpert advice: Your deferrals to a 403(b) plan are offset by the TSP (I am guessing), so you cannot also defer to a 403(b) unless you are catch-up eligible. However, if you are eligible for making contributions to a 457(b) plan, these deferrals are only aggregated with other 457(b) deferrals, so you can defer another $15,500 into a 457(b) plan. When I return to the office, I will try to look this up to clarify.

 

My second question is a complicated one (at least for me) I started a ROTH in 2006 and funded it with $4000. I then continued funding it in 2007 for $4000 and just put $5000 in for 2008. Well low and behold I make too much money for a Roth (something the Vanguard Salesperson neglected to inform me of) Now I'm trying to do the taxes with the Turbo Tax and it talks about penalties and recharacterization, etc. My AGI for 2006 was 151,900 and for 2007 as listed above was 164,000. Is there any auto calculators to tell me what I need to move out to a Traditional IRA. I don’t quite get the phase out things.

I recommend that you find a CPA or a well-regarded tax accountant to review your tax returns to determine the appropriate solution for your situation.

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"I work for the government and currently max out my TSP for the $15,500. My first question is can I still contribute to either a 403(b) and/or 457 and have it lower my taxes? My AGI for this year (married filing jointly) is $164,000."

I do not claim to be an expert regarding the TSP, so take this as nonexpert advice: Your deferrals to a 403(b) plan are offset by the TSP (I am guessing), so you cannot also defer to a 403(b) unless you are catch-up eligible. However, if you are eligible for making contributions to a 457(b) plan, these deferrals are only aggregated with other 457(b) deferrals, so you can defer another $15,500 into a 457(b) plan. When I return to the office, I will try to look this up to clarify.

 

My second question is a complicated one (at least for me) I started a ROTH in 2006 and funded it with $4000. I then continued funding it in 2007 for $4000 and just put $5000 in for 2008. Well low and behold I make too much money for a Roth (something the Vanguard Salesperson neglected to inform me of) Now I'm trying to do the taxes with the Turbo Tax and it talks about penalties and recharacterization, etc. My AGI for 2006 was 151,900 and for 2007 as listed above was 164,000. Is there any auto calculators to tell me what I need to move out to a Traditional IRA. I don’t quite get the phase out things.

I recommend that you find a CPA or a well-regarded tax accountant to review your tax returns to determine the appropriate solution for your situation.

 

 

Hi John,

 

The TSP operates under 401(a) of the Code. So the TSP contribution is not offset by the 403(b) contribution. So Glen can contribute $15,500 to the TSP and another $15,500 to EITHER a 403(b) or a 457(b).

 

Peace and hope,

Joel

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"I work for the government and currently max out my TSP for the $15,500. My first question is can I still contribute to either a 403(b) and/or 457 and have it lower my taxes? My AGI for this year (married filing jointly) is $164,000."

I do not claim to be an expert regarding the TSP, so take this as nonexpert advice: Your deferrals to a 403(b) plan are offset by the TSP (I am guessing), so you cannot also defer to a 403(b) unless you are catch-up eligible. However, if you are eligible for making contributions to a 457(b) plan, these deferrals are only aggregated with other 457(b) deferrals, so you can defer another $15,500 into a 457(b) plan. When I return to the office, I will try to look this up to clarify.

 

My second question is a complicated one (at least for me) I started a ROTH in 2006 and funded it with $4000. I then continued funding it in 2007 for $4000 and just put $5000 in for 2008. Well low and behold I make too much money for a Roth (something the Vanguard Salesperson neglected to inform me of) Now I'm trying to do the taxes with the Turbo Tax and it talks about penalties and recharacterization, etc. My AGI for 2006 was 151,900 and for 2007 as listed above was 164,000. Is there any auto calculators to tell me what I need to move out to a Traditional IRA. I don’t quite get the phase out things.

I recommend that you find a CPA or a well-regarded tax accountant to review your tax returns to determine the appropriate solution for your situation.

 

 

Hi John,

 

The TSP operates under 401(a) of the Code. So the TSP contribution is not offset by the 403(b) contribution. So Glen can contribute $15,500 to the TSP and another $15,500 to EITHER a 403(b) or a 457(b).

 

Peace and hope,

Joel

 

 

Joel:

 

If you are referring to the federal thrift savings plan the IRS regards it as a 401k plan, not a 401(a) plan and deferrals are limited to $15,500. See IRS publication 525, P 8-9. If the TSP is subject to the 401k plan limit of 15,500 on employee deferrals why isnt it aggregated with salary reduction 403b contributions under IRC 402(g) for a maximum deferral of $15,500 to both plans?

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Guest Sierra

 

 

"I work for the government and currently max out my TSP for the $15,500. My first question is can I still contribute to either a 403(b) and/or 457 and have it lower my taxes? My AGI for this year (married filing jointly) is $164,000."

I do not claim to be an expert regarding the TSP, so take this as nonexpert advice: Your deferrals to a 403(b) plan are offset by the TSP (I am guessing), so you cannot also defer to a 403(b) unless you are catch-up eligible. However, if you are eligible for making contributions to a 457(b) plan, these deferrals are only aggregated with other 457(b) deferrals, so you can defer another $15,500 into a 457(b) plan. When I return to the office, I will try to look this up to clarify.

 

My second question is a complicated one (at least for me) I started a ROTH in 2006 and funded it with $4000. I then continued funding it in 2007 for $4000 and just put $5000 in for 2008. Well low and behold I make too much money for a Roth (something the Vanguard Salesperson neglected to inform me of) Now I'm trying to do the taxes with the Turbo Tax and it talks about penalties and recharacterization, etc. My AGI for 2006 was 151,900 and for 2007 as listed above was 164,000. Is there any auto calculators to tell me what I need to move out to a Traditional IRA. I don’t quite get the phase out things.

I recommend that you find a CPA or a well-regarded tax accountant to review your tax returns to determine the appropriate solution for your situation.

 

 

Hi John,

 

The TSP operates under 401(a) of the Code. So the TSP contribution is not offset by the 403(b) contribution. So Glen can contribute $15,500 to the TSP and another $15,500 to EITHER a 403(b) or a 457(b).

 

Peace and hope,

Joel

 

 

Joel:

 

If you are referring to the federal thrift savings plan the IRS regards it as a 401k plan, not a 401(a) plan and deferrals are limited to $15,500. See IRS publication 525, P 8-9. If the TSP is subject to the 401k plan limit of 15,500 on employee deferrals why isnt it aggregated with salary reduction 403b contributions under IRC 402(g) for a maximum deferral of $15,500 to both plans?

 

 

Intruder: You are wrong. Here is the proof:

 

How is the TSP treated under the I.R.C.?

I.R.C. § 7701(j) states that the TSP is to be treated as a trust described in § 401(a) which is exempt from taxation under § 501(a). (See also 5 U.S.C. § 8440.)

 

I respectfully request that you admit that you posted the wrong information and stand corrected.

 

Joel

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"I work for the government and currently max out my TSP for the $15,500. My first question is can I still contribute to either a 403(b) and/or 457 and have it lower my taxes? My AGI for this year (married filing jointly) is $164,000."

I do not claim to be an expert regarding the TSP, so take this as nonexpert advice: Your deferrals to a 403(b) plan are offset by the TSP (I am guessing), so you cannot also defer to a 403(b) unless you are catch-up eligible. However, if you are eligible for making contributions to a 457(b) plan, these deferrals are only aggregated with other 457(b) deferrals, so you can defer another $15,500 into a 457(b) plan. When I return to the office, I will try to look this up to clarify.

 

My second question is a complicated one (at least for me) I started a ROTH in 2006 and funded it with $4000. I then continued funding it in 2007 for $4000 and just put $5000 in for 2008. Well low and behold I make too much money for a Roth (something the Vanguard Salesperson neglected to inform me of) Now I'm trying to do the taxes with the Turbo Tax and it talks about penalties and recharacterization, etc. My AGI for 2006 was 151,900 and for 2007 as listed above was 164,000. Is there any auto calculators to tell me what I need to move out to a Traditional IRA. I don’t quite get the phase out things.

I recommend that you find a CPA or a well-regarded tax accountant to review your tax returns to determine the appropriate solution for your situation.

 

 

Hi John,

 

The TSP operates under 401(a) of the Code. So the TSP contribution is not offset by the 403(b) contribution. So Glen can contribute $15,500 to the TSP and another $15,500 to EITHER a 403(b) or a 457(b).

 

Peace and hope,

Joel

 

 

Joel:

 

If you are referring to the federal thrift savings plan the IRS regards it as a 401k plan, not a 401(a) plan and deferrals are limited to $15,500. See IRS publication 525, P 8-9. If the TSP is subject to the 401k plan limit of 15,500 on employee deferrals why isnt it aggregated with salary reduction 403b contributions under IRC 402(g) for a maximum deferral of $15,500 to both plans?

 

 

Intruder: You are wrong. Here is the proof:

 

How is the TSP treated under the I.R.C.?

I.R.C. § 7701(j) states that the TSP is to be treated as a trust described in § 401(a) which is exempt from taxation under § 501(a). (See also 5 U.S.C. § 8440.)

 

I respectfully request that you admit that you posted the wrong information and stand corrected.

 

Joel

 

 

Joel:

 

All 401k plans are qualified plans that meet the requirements of IRC 401(a). IRC 401(k)(1) states that a profit sharing or stock bonus plan shall not be considered as not satisifying the requirements of IRC 401(a) merely because the plan includes a qualified cash or deferred arrangement defined in IRC 401(k)(2).

 

If you had read IRC 7701(j) you would have noticed subsection (1)© states that the TSP will be subject to all dollar limitations of IRC 402(e)(3) which provides that contributions made under a cash or deferred arrangement under IRC 401(k)(2) or a salary reduction agreement under 403(b) shall not be treated as distributed. IRC 402(g) provides that not withstanding IRC 402(e)(3), elective deferrals shall be be included in the individual's gross income to the extent they exeed the applicable dollar amount. The applicable dollar amount for 2008 is 15,500. Sub section 402(g)(3) provides that the elective deferrals for a taxable year for an individual include the sum of salary deferrals under IRC 401(k), salary reduction under 403(b) and employee contributions to a SIMPLE plan.

 

Therefore, employee deferrals to a 403b plan must be aggregated with employee deferrals to the TSP for a maximum of 15,500. The employee could defer an additional $15,500 under a 457(b) plan.

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Intruder,

 

Thanks for the info, I didnt know this was going to be a heated debate. So basically your saying that I can also contribute to a 457 plan just not to a 403b. Right?

 

Thanks,

Glen

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"I work for the government and currently max out my TSP for the $15,500. My first question is can I still contribute to either a 403(b) and/or 457 and have it lower my taxes? My AGI for this year (married filing jointly) is $164,000."

I do not claim to be an expert regarding the TSP, so take this as nonexpert advice: Your deferrals to a 403(b) plan are offset by the TSP (I am guessing), so you cannot also defer to a 403(b) unless you are catch-up eligible. However, if you are eligible for making contributions to a 457(b) plan, these deferrals are only aggregated with other 457(b) deferrals, so you can defer another $15,500 into a 457(b) plan. When I return to the office, I will try to look this up to clarify.

 

My second question is a complicated one (at least for me) I started a ROTH in 2006 and funded it with $4000. I then continued funding it in 2007 for $4000 and just put $5000 in for 2008. Well low and behold I make too much money for a Roth (something the Vanguard Salesperson neglected to inform me of) Now I'm trying to do the taxes with the Turbo Tax and it talks about penalties and recharacterization, etc. My AGI for 2006 was 151,900 and for 2007 as listed above was 164,000. Is there any auto calculators to tell me what I need to move out to a Traditional IRA. I don’t quite get the phase out things.

I recommend that you find a CPA or a well-regarded tax accountant to review your tax returns to determine the appropriate solution for your situation.

 

 

Hi John,

 

The TSP operates under 401(a) of the Code. So the TSP contribution is not offset by the 403(b) contribution. So Glen can contribute $15,500 to the TSP and another $15,500 to EITHER a 403(b) or a 457(b).

 

Peace and hope,

Joel

 

 

Joel:

 

If you are referring to the federal thrift savings plan the IRS regards it as a 401k plan, not a 401(a) plan and deferrals are limited to $15,500. See IRS publication 525, P 8-9. If the TSP is subject to the 401k plan limit of 15,500 on employee deferrals why isnt it aggregated with salary reduction 403b contributions under IRC 402(g) for a maximum deferral of $15,500 to both plans?

 

 

Intruder: You are wrong. Here is the proof:

 

How is the TSP treated under the I.R.C.?

I.R.C. § 7701(j) states that the TSP is to be treated as a trust described in § 401(a) which is exempt from taxation under § 501(a). (See also 5 U.S.C. § 8440.)

 

I respectfully request that you admit that you posted the wrong information and stand corrected.

 

Joel

 

 

Joel:

 

All 401k plans are qualified plans that meet the requirements of IRC 401(a). IRC 401(k)(1) states that a profit sharing or stock bonus plan shall not be considered as not satisifying the requirements of IRC 401(a) merely because the plan includes a qualified cash or deferred arrangement defined in IRC 401(k)(2).

 

If you had read IRC 7701(j) you would have noticed subsection (1)© states that the TSP will be subject to all dollar limitations of IRC 402(e)(3) which provides that contributions made under a cash or deferred arrangement under IRC 401(k)(2) or a salary reduction agreement under 403(b) shall not be treated as distributed. IRC 402(g) provides that not withstanding IRC 402(e)(3), elective deferrals shall be be included in the individual's gross income to the extent they exeed the applicable dollar amount. The applicable dollar amount for 2008 is 15,500. Sub section 402(g)(3) provides that the elective deferrals for a taxable year for an individual include the sum of salary deferrals under IRC 401(k), salary reduction under 403(b) and employee contributions to a SIMPLE plan.

 

Therefore, employee deferrals to a 403b plan must be aggregated with employee deferrals to the TSP for a maximum of 15,500. The employee could defer an additional $15,500 under a 457(b) plan.

 

Hi folks,

Glen, I would see a CPA to clarify. I've been reading the IRS documents referenced above and find myself cross-eyed.

Joel, I thought that only educators with a 457(b) could also contribute to a 403(b) to a maximum AGI of $31,000.

d

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Guest Sierra

 

 

 

 

 

"I work for the government and currently max out my TSP for the $15,500. My first question is can I still contribute to either a 403(b) and/or 457 and have it lower my taxes? My AGI for this year (married filing jointly) is $164,000."

I do not claim to be an expert regarding the TSP, so take this as nonexpert advice: Your deferrals to a 403(b) plan are offset by the TSP (I am guessing), so you cannot also defer to a 403(b) unless you are catch-up eligible. However, if you are eligible for making contributions to a 457(b) plan, these deferrals are only aggregated with other 457(b) deferrals, so you can defer another $15,500 into a 457(b) plan. When I return to the office, I will try to look this up to clarify.

 

My second question is a complicated one (at least for me) I started a ROTH in 2006 and funded it with $4000. I then continued funding it in 2007 for $4000 and just put $5000 in for 2008. Well low and behold I make too much money for a Roth (something the Vanguard Salesperson neglected to inform me of) Now I'm trying to do the taxes with the Turbo Tax and it talks about penalties and recharacterization, etc. My AGI for 2006 was 151,900 and for 2007 as listed above was 164,000. Is there any auto calculators to tell me what I need to move out to a Traditional IRA. I don’t quite get the phase out things.

I recommend that you find a CPA or a well-regarded tax accountant to review your tax returns to determine the appropriate solution for your situation.

 

 

Hi John,

 

The TSP operates under 401(a) of the Code. So the TSP contribution is not offset by the 403(b) contribution. So Glen can contribute $15,500 to the TSP and another $15,500 to EITHER a 403(b) or a 457(b).

 

Peace and hope,

Joel

 

 

Joel:

 

If you are referring to the federal thrift savings plan the IRS regards it as a 401k plan, not a 401(a) plan and deferrals are limited to $15,500. See IRS publication 525, P 8-9. If the TSP is subject to the 401k plan limit of 15,500 on employee deferrals why isnt it aggregated with salary reduction 403b contributions under IRC 402(g) for a maximum deferral of $15,500 to both plans?

 

 

Intruder: You are wrong. Here is the proof:

 

How is the TSP treated under the I.R.C.?

I.R.C. § 7701(j) states that the TSP is to be treated as a trust described in § 401(a) which is exempt from taxation under § 501(a). (See also 5 U.S.C. § 8440.)

 

I respectfully request that you admit that you posted the wrong information and stand corrected.

 

Joel

 

 

Joel:

 

All 401k plans are qualified plans that meet the requirements of IRC 401(a). IRC 401(k)(1) states that a profit sharing or stock bonus plan shall not be considered as not satisifying the requirements of IRC 401(a) merely because the plan includes a qualified cash or deferred arrangement defined in IRC 401(k)(2).

 

If you had read IRC 7701(j) you would have noticed subsection (1)© states that the TSP will be subject to all dollar limitations of IRC 402(e)(3) which provides that contributions made under a cash or deferred arrangement under IRC 401(k)(2) or a salary reduction agreement under 403(b) shall not be treated as distributed. IRC 402(g) provides that not withstanding IRC 402(e)(3), elective deferrals shall be be included in the individual's gross income to the extent they exeed the applicable dollar amount. The applicable dollar amount for 2008 is 15,500. Sub section 402(g)(3) provides that the elective deferrals for a taxable year for an individual include the sum of salary deferrals under IRC 401(k), salary reduction under 403(b) and employee contributions to a SIMPLE plan.

 

Therefore, employee deferrals to a 403b plan must be aggregated with employee deferrals to the TSP for a maximum of 15,500. The employee could defer an additional $15,500 under a 457(b) plan.

 

Hi folks,

Glen, I would see a CPA to clarify. I've been reading the IRS documents referenced above and find myself cross-eyed.

Joel, I thought that only educators with a 457(b) could also contribute to a 403(b) to a maximum AGI of $31,000.

d

 

 

To Clarify: Anyone with a 457 and a 401(k) can max out on both plans. Anyone with a 403(b) and 457 may max out on both plans. Aggregation is required by anyone with a 401(k) and 403(b).

 

Having said that, contributions to the TSP, a 401(a) plan, must be aggregated with all other salary deferral plans i.e. 401(k), 403(b) and 457(b). Here is the link: www.tsp.gov/forms/oc91-13.pdf.

 

Peace and Hope,

Joel

 

 

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Guest Sierra

 

 

 

 

 

 

"I work for the government and currently max out my TSP for the $15,500. My first question is can I still contribute to either a 403(b) and/or 457 and have it lower my taxes? My AGI for this year (married filing jointly) is $164,000."

I do not claim to be an expert regarding the TSP, so take this as nonexpert advice: Your deferrals to a 403(b) plan are offset by the TSP (I am guessing), so you cannot also defer to a 403(b) unless you are catch-up eligible. However, if you are eligible for making contributions to a 457(b) plan, these deferrals are only aggregated with other 457(b) deferrals, so you can defer another $15,500 into a 457(b) plan. When I return to the office, I will try to look this up to clarify.

 

My second question is a complicated one (at least for me) I started a ROTH in 2006 and funded it with $4000. I then continued funding it in 2007 for $4000 and just put $5000 in for 2008. Well low and behold I make too much money for a Roth (something the Vanguard Salesperson neglected to inform me of) Now I'm trying to do the taxes with the Turbo Tax and it talks about penalties and recharacterization, etc. My AGI for 2006 was 151,900 and for 2007 as listed above was 164,000. Is there any auto calculators to tell me what I need to move out to a Traditional IRA. I don’t quite get the phase out things.

I recommend that you find a CPA or a well-regarded tax accountant to review your tax returns to determine the appropriate solution for your situation.

 

 

Hi John,

 

The TSP operates under 401(a) of the Code. So the TSP contribution is not offset by the 403(b) contribution. So Glen can contribute $15,500 to the TSP and another $15,500 to EITHER a 403(b) or a 457(b).

 

Peace and hope,

Joel

 

 

Joel:

 

If you are referring to the federal thrift savings plan the IRS regards it as a 401k plan, not a 401(a) plan and deferrals are limited to $15,500. See IRS publication 525, P 8-9. If the TSP is subject to the 401k plan limit of 15,500 on employee deferrals why isnt it aggregated with salary reduction 403b contributions under IRC 402(g) for a maximum deferral of $15,500 to both plans?

 

 

Intruder: You are wrong. Here is the proof:

 

How is the TSP treated under the I.R.C.?

I.R.C. § 7701(j) states that the TSP is to be treated as a trust described in § 401(a) which is exempt from taxation under § 501(a). (See also 5 U.S.C. § 8440.)

 

I respectfully request that you admit that you posted the wrong information and stand corrected.

 

Joel

 

 

Joel:

 

All 401k plans are qualified plans that meet the requirements of IRC 401(a). IRC 401(k)(1) states that a profit sharing or stock bonus plan shall not be considered as not satisifying the requirements of IRC 401(a) merely because the plan includes a qualified cash or deferred arrangement defined in IRC 401(k)(2).

 

If you had read IRC 7701(j) you would have noticed subsection (1)© states that the TSP will be subject to all dollar limitations of IRC 402(e)(3) which provides that contributions made under a cash or deferred arrangement under IRC 401(k)(2) or a salary reduction agreement under 403(b) shall not be treated as distributed. IRC 402(g) provides that not withstanding IRC 402(e)(3), elective deferrals shall be be included in the individual's gross income to the extent they exeed the applicable dollar amount. The applicable dollar amount for 2008 is 15,500. Sub section 402(g)(3) provides that the elective deferrals for a taxable year for an individual include the sum of salary deferrals under IRC 401(k), salary reduction under 403(b) and employee contributions to a SIMPLE plan.

 

Therefore, employee deferrals to a 403b plan must be aggregated with employee deferrals to the TSP for a maximum of 15,500. The employee could defer an additional $15,500 under a 457(b) plan.

 

Hi folks,

Glen, I would see a CPA to clarify. I've been reading the IRS documents referenced above and find myself cross-eyed.

Joel, I thought that only educators with a 457(b) could also contribute to a 403(b) to a maximum AGI of $31,000.

d

 

 

To Clarify: Anyone with a 457 and a 401(k) can max out on both plans. Anyone with a 403(b) and 457 may max out on both plans. Aggregation is required by anyone with a 401(k) and 403(b).

 

Having said that, contributions to the TSP, a 401(a) plan, must be aggregated with all other salary deferral plans i.e. 401(k), 403(b) and 457(b). Here is the link: www.tsp.gov/forms/oc91-13.pdf.

 

Peace and Hope,

Joel

 

 

To be more precise here is page 7 of the above link:

 

Joel

=========================================================

 

Form TSP-44 (1/2008)

PREVIOUS EDITIONS OBSOLETE

Instructions

You may choose to receive a refund of any or all of your excess employee contributions from the TSP, or

you may choose to receive part of your excess contributions from the TSP and the rest from your other

plan. This request applies only to the refund from the TSP. It must be received by the Federal Retirement

Thrift Investment Board no later than March 31, 2008. Forms received after that date will not be

processed. Also, an incomplete or incorrectly completed form will not be processed.

 

1. Complete this form if in 2007 (1) you were a participant in the TSP and a plan or plans as described under sections 401(k), 403(b) 408(k), 457, or 501©(18) of the Internal Revenue Code and (2) the total contributions you made to all of these plans exceeded $15,500 or, if you elected to make catch-up contributions, the total contributions you made exceeded $20,500. Your excess

contributions will be removed from your account beginning with the last contributions made in

December. If that amount is not sufficient to remove all of the excess, an earlier December contribution

will be removed, then the last contribution made in November will be removed, and so on.

The TSP will notify you and the IRS of the return of both employee contributions and attributable

earnings, reporting each amount on a separate Form 1099-R, Distributions from Pensions, Annuities,

Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. It is your responsibility to

report these amounts as taxable income for the appropriate years on your Federal tax returns, or

to file amended tax returns, if necessary. Note: You should consult with your plan administrator,

trustee, or custodian concerning any limit on the amount you can contribute to your TSP account

if you also contribute to another retirement plan or a tax-sheltered annuity.

 

2. Be sure to include on the front of this form the complete name of the other plan or plans to which

you made contributions. Do not include the Thrift Savings Plan. For excess contributions that

relate only to your TSP accounts (i.e., civilian and uniformed services), do not complete this form.

Any excess contribution resulting from your contributions to your combined TSP accounts will be

returned to you automatically.

 

3. Submit the completed form to:

Federal Retirement Thrift Investment Board

Attn: Office of Participant Services

1250 H Street, NW

Washington, DC 20005

Fax Number: (202) 942-1451

PRIVACY ACT NOTICE. We are authorized to request the information you provide

on this form under 5 U.S.C. chapter 84, Federal Employees’ Retirement System.

We will use this information to identify your TSP account and to process your transaction.

In addition, this information may be shared with other Federal agencies for

statistical, auditing, or archiving purposes. We may share the information with law

enforcement agencies investigating a violation of civil or criminal law, or agencies

implementing a statute, rule, or order. It may be shared with congressional offices,

private sector audit firms, spouses, former spouses, and beneficiaries, and their attorneys.

We may disclose relevant portions of the information to appropriate parties

engaged in litigation and for other routine uses as specified in the Federal Register.

You are not required by law to provide this information, but if you do not provide it,

we will not be able to process your request.

=========================================================

 

Intruder: Do you still insist that the TSP is a 401(k) plan? Do you still insists that a TSP participant can contribute an additional $15,500/20,500 to a 457(b)?

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"I work for the government and currently max out my TSP for the $15,500. My first question is can I still contribute to either a 403(b) and/or 457 and have it lower my taxes? My AGI for this year (married filing jointly) is $164,000."

I do not claim to be an expert regarding the TSP, so take this as nonexpert advice: Your deferrals to a 403(b) plan are offset by the TSP (I am guessing), so you cannot also defer to a 403(b) unless you are catch-up eligible. However, if you are eligible for making contributions to a 457(b) plan, these deferrals are only aggregated with other 457(b) deferrals, so you can defer another $15,500 into a 457(b) plan. When I return to the office, I will try to look this up to clarify.

 

My second question is a complicated one (at least for me) I started a ROTH in 2006 and funded it with $4000. I then continued funding it in 2007 for $4000 and just put $5000 in for 2008. Well low and behold I make too much money for a Roth (something the Vanguard Salesperson neglected to inform me of) Now I'm trying to do the taxes with the Turbo Tax and it talks about penalties and recharacterization, etc. My AGI for 2006 was 151,900 and for 2007 as listed above was 164,000. Is there any auto calculators to tell me what I need to move out to a Traditional IRA. I don’t quite get the phase out things.

I recommend that you find a CPA or a well-regarded tax accountant to review your tax returns to determine the appropriate solution for your situation.

 

 

Hi John,

 

The TSP operates under 401(a) of the Code. So the TSP contribution is not offset by the 403(b) contribution. So Glen can contribute $15,500 to the TSP and another $15,500 to EITHER a 403(b) or a 457(b).

 

Peace and hope,

Joel

 

 

Joel:

 

If you are referring to the federal thrift savings plan the IRS regards it as a 401k plan, not a 401(a) plan and deferrals are limited to $15,500. See IRS publication 525, P 8-9. If the TSP is subject to the 401k plan limit of 15,500 on employee deferrals why isnt it aggregated with salary reduction 403b contributions under IRC 402(g) for a maximum deferral of $15,500 to both plans?

 

 

Intruder: You are wrong. Here is the proof:

 

How is the TSP treated under the I.R.C.?

I.R.C. § 7701(j) states that the TSP is to be treated as a trust described in § 401(a) which is exempt from taxation under § 501(a). (See also 5 U.S.C. § 8440.)

 

I respectfully request that you admit that you posted the wrong information and stand corrected.

 

Joel

 

 

Joel:

 

All 401k plans are qualified plans that meet the requirements of IRC 401(a). IRC 401(k)(1) states that a profit sharing or stock bonus plan shall not be considered as not satisifying the requirements of IRC 401(a) merely because the plan includes a qualified cash or deferred arrangement defined in IRC 401(k)(2).

 

If you had read IRC 7701(j) you would have noticed subsection (1)© states that the TSP will be subject to all dollar limitations of IRC 402(e)(3) which provides that contributions made under a cash or deferred arrangement under IRC 401(k)(2) or a salary reduction agreement under 403(b) shall not be treated as distributed. IRC 402(g) provides that not withstanding IRC 402(e)(3), elective deferrals shall be be included in the individual's gross income to the extent they exeed the applicable dollar amount. The applicable dollar amount for 2008 is 15,500. Sub section 402(g)(3) provides that the elective deferrals for a taxable year for an individual include the sum of salary deferrals under IRC 401(k), salary reduction under 403(b) and employee contributions to a SIMPLE plan.

 

Therefore, employee deferrals to a 403b plan must be aggregated with employee deferrals to the TSP for a maximum of 15,500. The employee could defer an additional $15,500 under a 457(b) plan.

 

Hi folks,

Glen, I would see a CPA to clarify. I've been reading the IRS documents referenced above and find myself cross-eyed.

Joel, I thought that only educators with a 457(b) could also contribute to a 403(b) to a maximum AGI of $31,000.

d

 

 

To Clarify: Anyone with a 457 and a 401(k) can max out on both plans. Anyone with a 403(b) and 457 may max out on both plans. Aggregation is required by anyone with a 401(k) and 403(b).

 

Having said that, contributions to the TSP, a 401(a) plan, must be aggregated with all other salary deferral plans i.e. 401(k), 403(b) and 457(b). Here is the link: www.tsp.gov/forms/oc91-13.pdf.

 

Peace and Hope,

Joel

 

 

To be more precise here is page 7 of the above link:

 

Joel

=========================================================

 

Form TSP-44 (1/2008)

PREVIOUS EDITIONS OBSOLETE

Instructions

You may choose to receive a refund of any or all of your excess employee contributions from the TSP, or

you may choose to receive part of your excess contributions from the TSP and the rest from your other

plan. This request applies only to the refund from the TSP. It must be received by the Federal Retirement

Thrift Investment Board no later than March 31, 2008. Forms received after that date will not be

processed. Also, an incomplete or incorrectly completed form will not be processed.

 

1. Complete this form if in 2007 (1) you were a participant in the TSP and a plan or plans as described under sections 401(k), 403(b) 408(k), 457, or 501©(18) of the Internal Revenue Code and (2) the total contributions you made to all of these plans exceeded $15,500 or, if you elected to make catch-up contributions, the total contributions you made exceeded $20,500. Your excess

contributions will be removed from your account beginning with the last contributions made in

December. If that amount is not sufficient to remove all of the excess, an earlier December contribution

will be removed, then the last contribution made in November will be removed, and so on.

The TSP will notify you and the IRS of the return of both employee contributions and attributable

earnings, reporting each amount on a separate Form 1099-R, Distributions from Pensions, Annuities,

Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. It is your responsibility to

report these amounts as taxable income for the appropriate years on your Federal tax returns, or

to file amended tax returns, if necessary. Note: You should consult with your plan administrator,

trustee, or custodian concerning any limit on the amount you can contribute to your TSP account

if you also contribute to another retirement plan or a tax-sheltered annuity.

 

2. Be sure to include on the front of this form the complete name of the other plan or plans to which

you made contributions. Do not include the Thrift Savings Plan. For excess contributions that

relate only to your TSP accounts (i.e., civilian and uniformed services), do not complete this form.

Any excess contribution resulting from your contributions to your combined TSP accounts will be

returned to you automatically.

 

3. Submit the completed form to:

Federal Retirement Thrift Investment Board

Attn: Office of Participant Services

1250 H Street, NW

Washington, DC 20005

Fax Number: (202) 942-1451

PRIVACY ACT NOTICE. We are authorized to request the information you provide

on this form under 5 U.S.C. chapter 84, Federal Employees’ Retirement System.

We will use this information to identify your TSP account and to process your transaction.

In addition, this information may be shared with other Federal agencies for

statistical, auditing, or archiving purposes. We may share the information with law

enforcement agencies investigating a violation of civil or criminal law, or agencies

implementing a statute, rule, or order. It may be shared with congressional offices,

private sector audit firms, spouses, former spouses, and beneficiaries, and their attorneys.

We may disclose relevant portions of the information to appropriate parties

engaged in litigation and for other routine uses as specified in the Federal Register.

You are not required by law to provide this information, but if you do not provide it,

we will not be able to process your request.

=========================================================

 

Intruder: Do you still insist that the TSP is a 401(k) plan? Do you still insists that a TSP participant can contribute an additional $15,500/20,500 to a 457(b)?

 

 

 

hmmm, I think he has you there???

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Joel

 

You really need to limit the length of your posts to information relevant to the issue. The length of your last post makes it difficult to find your question.

 

1. The TSP is a 401k plan because IRC 7701(j) limits contributions to the 401k limit of 15,500 which can be contributed by salary reduction which is the defining characteristic of all 401k plans.

 

2. Reg 1.402(g)-1(b) limits annual elective deferrals to the sum of contributions under 401k, 403b, SAR-SEPs under 408(k) and contributions to a 501©(18) trust. There is no aggregation with contributions under IRC 457. IRC 7701(j) limits contributions to the TSP to amount to the elective deferrals permited under 401(k).

 

3. IRC 457© limits contributions to a 457(b) plan to 15,500 without aggregation with any other plan. There is no aggregation of contributions to a 457(b) plan with contributions to the TSP under the 457 regs.

 

4. You need to ask the TSP plan administrator what is the basis under the IRC for aggregating 457 contributions with the TSP.

 

Glen:

 

Where does he have me?

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Joel:

 

If you google "Thrift Savings plan excess contributions" you will find the fact sheet for annual contributions. Part II list the plans that must be aggregated with the TSP as 401k, 403b, 408k and 501©(18). 457 plans are not listed as being aggregated on the fact sheet.

 

The TSP 44 form incorrectly lists 457 plans as being aggrregated with the TSP.

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