Whether you are a CSRS employee or a FERS employee, every two weeks, you contribute a portion of your paycheck into your respective retirement system, and each of these systems are at least partially taxed.
So how do you, as a federal employee, file your taxes and ensure that you fully understand how you’re being taxed, the benefits available to you, and how they will be paid out?
In this episode, Dan Sipe and Ed Zurndorfer discuss everything federal employees need to know regarding tax benefits to ensure that you’re not leaving any money on the table.
Dan and Ed discuss:
• CSRS & FERS annuities and how they affect your taxes
• The 310-month payment rule and the IRS’s simplified rule
• How survivor benefits are paid out and taxed
• The importance of filling out your beneficiary forms
• How the OPM calculates different benefits and payments
• And more

Resources:
Fed-Zone:

STWS Webinars:

FEDZONE Article:

Connect:
Dan Sipe: Dan.sipe@stwserve.com
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Federal retirement benefits can provide a valuable source of income for individuals who have worked for the government or served in the military. However, many people may be unsure about how these benefits are taxed. Understanding how federal retirement benefits are taxed can help individuals better plan for their financial future.

Federal retirement benefits, such as those provided by the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS), are generally subject to federal income tax. This means that individuals receiving these benefits must report them as income on their tax return each year.

The amount of federal income tax you will owe on your federal retirement benefits depends on a variety of factors, including your total income, filing status, and any deductions or credits you may be eligible for. In general, the more income you have, the higher your tax bill will be.

For most federal retirement benefits, including those received from CSRS and FERS, the income is taxed at ordinary income tax rates. This means that the tax rate you pay on your federal retirement benefits will be the same as the tax rate you pay on other sources of income, such as wages or investment income.

One important factor to consider when it comes to federal retirement benefits is whether or not they are subject to Social Security taxes. In general, federal retirement benefits that are received as a pension are not subject to Social Security taxes. However, federal retirement benefits that are received as an annuity may be subject to Social Security taxes, depending on the specific circumstances.

It is also worth noting that federal retirement benefits may be subject to state income taxes, depending on the laws of the state in which you reside. Some states tax federal retirement benefits at the same rate as federal income tax, while others may provide exemptions or deductions for these benefits.

Overall, it is important for individuals receiving federal retirement benefits to understand how these benefits are taxed so they can properly plan for their financial future. Consulting with a tax professional or financial advisor can help individuals navigate the complex tax rules and ensure they are maximizing their retirement income. By being informed and proactive, individuals can make the most of their federal retirement benefits and achieve financial security in their golden years.