Thrift Saving Plan Contribution

[Treasurehunt1]

How to reduce income for Thrift Saving Plan Contributions.

[qbteachmt]

When an investment is funded with pre-tax funds, there is no further deduction; they were already provided before income taxes were computed on them. That's why distributions will be taxable.

Trying to deduct pre-tax funds would be double-dipping.

[Treasurehunt1]

The investment funds were included in taxable income which is unusual. I asked the client to follow up with the employer, which is the Federal Gov, to determine why the funds are taxable.

[Norman2001 · Accepted solution]

Maybe he participates in a Roth TSP.

[qbteachmt]

If they are participating in a Roth option, the income is taxed and then later, the distributions are tax free. You don't need to do anything except use the employer reporting form (W-2) and fill in as you see the info provided. There is no Deduction for contributing to your employer retirement plan through either TSP option; it's already accounted for.