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Returning Member

W4 & Related

Last year was my first year of retirement.  While spouse will continue to work a few more years as she is younger, I am 65 and my retirement income consists if SS, a gov't pension, $2500 a month from regular TSP, and we have some rental income.  That first year of retirement got hit with a 11K+ tax bill.  In reviewing spouse's W4, we changed it to Head of Household as it withheld more.  Was that a correct move?  Also, as an aside, one of our continued disappointments is we can never take advantage of our Schedule E deductions because our combined incomes are/were too high.  Also, the $2500.00 monthly amount from the TSP is a must right now to balance income with expenses given our home is in expensive HI.  Thinking too of converting - over the next four year time period - the TSP to a Roth IRA,  Good move?  We own - or should I say, the baqnk owns - our home with anticipated payoff in 2037 as I am making extra principal payments.  Any helpful suggestions would be beneficial.  Thank you.

1 Reply
Employee Tax Expert

W4 & Related

Hi pacific_calm,


Thank you for your questions. Regarding the 11k+ tax bill, having more tax withheld will be helpful and avoid triggering the underpayment penalty. You can always put Additional Withholding in Step 4 (c) on W-4 for Extra Withholdings if you need. Our W-4 Calculator is a great tool to help you to find out if you need to withhold more so you can adjust your W-4.


For your rental deduction, there is limit to offset the loss if your AGI is high and here is the link for your reference.


For TSP to Roth, this article may be a good one to help you.


You may give TurboTax a call anytime and we can review the impacts with you for each scenario. 


Have a wonderful day and mahalo! 



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