If you were contributing (both regular and catch-up) to the traditional Thrift Savings Plan you would have no cost basis in the TSP, as all of your contributions would have come from pre-tax dollars and the taxes on your earnings would have been deferred. You would have to pay federal income tax (at your rate for ordinary income) on everything you withdrew.
If, on the other hand, you contributed to the Roth TSP, your cost basis would be the amount of your Roth contributions and, as long as your withdrawals were qualified, you would not pay any tax on your Roth withdrawals.
The TSP currently requires that all withdrawals be done proportionally between your traditional and Roth balances.
Hi,
I have a similar question. I worked as a civil servant for a number of years and contributed to TSP through both regular & catch-up. I am now retired and will soon be required to take mandatory withdrawals. My question is what is the cost basis of my TSP for IRS purposes; is it:
* The sum of my regular contributions?
* The sum of my regular contributions + catch-up contributions?
* The sum of my regular contributions + catch-up contributions + employer matching?
Logically, I can work my way through each of the above, but am not sure what the IRS view is.
Not only do I have the TSP statements, but also have tracked in Quicken so the totals are a straight-forward matter.
Appreciate any advice
Thank you