Originally Posted by PsyopRanger
I have a colleague who is a government employee overseas (not in a war zone) but his pay is tax free up to a certain amount, he also receives a military pension.
Lance, your colleague may want to dig into his TSP contributions some more. Here's a paragraph from Military.com's weekly update:
"One way to save for retirement is to place money into the Thrift Savings Plan (TSP). The TSP blah blah blah. For individuals in career fields who still receive re-enlistment bonuses, they may place up to $42,000 -- tax free, of course -- into their TSP accounts. All money placed into a TSP account in a tax-exempt combat zone is also tax-exempt when it is withdrawn. For more information, visit the Thrift Savings Plan website."
The implication is that tax-free income placed into a tax-deferred account may still be able to be withdrawn tax-free. It'd be necessary to track the basis of the TSP contributions...
I learn something new every month or two from those Military.com e-mails, and "The Military Advantage" is the best benefits book I've ever