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priondefolder
New Member

I am in the Air Guard, and am not sure if contributing to my TSP qualifies me for the retirement contribution tax break. Do either this or my military plan qualify me?

 
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JulieH1
New Member

I am in the Air Guard, and am not sure if contributing to my TSP qualifies me for the retirement contribution tax break. Do either this or my military plan qualify me?

No.  TSP is a pre-tax benefit that is not the same as an IRA or 401(k).

You can't deduct contributions to traditional TSPs because they're deducted directly from paychecks. When your employer sends you your W-2, your taxable income won't include your TSP contributions. For example, assume your salary is $68,000, and you contribute $6,000 to your traditional TSP. You'll only see $62,000 of taxable income in box 1 of the W-2. Claiming that deduction would count the same TSP contribution twice, which wouldn't make the IRS very happy.

See this for more information:

https://budgeting.thenest.com/can-deduct-contribution-thrift-savings-plan-tax-return-24799.html

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JulieH1
New Member

I am in the Air Guard, and am not sure if contributing to my TSP qualifies me for the retirement contribution tax break. Do either this or my military plan qualify me?

No.  TSP is a pre-tax benefit that is not the same as an IRA or 401(k).

You can't deduct contributions to traditional TSPs because they're deducted directly from paychecks. When your employer sends you your W-2, your taxable income won't include your TSP contributions. For example, assume your salary is $68,000, and you contribute $6,000 to your traditional TSP. You'll only see $62,000 of taxable income in box 1 of the W-2. Claiming that deduction would count the same TSP contribution twice, which wouldn't make the IRS very happy.

See this for more information:

https://budgeting.thenest.com/can-deduct-contribution-thrift-savings-plan-tax-return-24799.html

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