Wish I had done this last year, but I didn't know what the new tax rates were going to be so I chickened out. Just sent in my TSP monthly adjustment for 2019 and stepped it up a LOT to try and empty my US Govt retirement account as soon as possible without killing myself with taxes. That account should empty about 5 months into 2020 and then my plan was to take my UK wife off my US taxes in tax year 2021 and then she can start taking her pensions etc without having to pay US taxes on it.
For this one year, I should have an income of around $310,000 between my pension and what I'm pulling out from that account. TSP automatically pulls out 20% when you withdraw that pre-tax money. Using 2018 tax brackets......
$0-19,050-- Tax rate is 10% TSP taxes that at 20%= $15,240 At 10%= $17,145 IRS owes me the difference of $1905
$19,050-$77,400 The difference is $58,350. 20% tax=$46,680 12% tax=52,515 IRS owes me $5835 on that amount
$77,400-165,000 The difference is $87,600 20% tax=$70,080 22% tax=$68,328 I owe $1752 on that amount
$165,000-310,000 The difference is $145,000 20% tax=$116,000 24% tax=$110,200 I owe $5800 on that amount
$315,000 is the limit, I will be about $310,000
I thought I was going to owe a bunch of money, but if my math is close (always doubtful) the IRS would owe me about $188.
Did I do this even close to correctly?
Fred
