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After tax funds in 403B account; is income after tax also?
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Frustrated
Apr 25, 2016, 12:23:55 PM4/25/16
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My wife has $90,000 in a TIAA 403B account. The statement says $60,000 is before tax and $30,000 is after tax. (we don't know how it got to be after tax, but that is neither here nor there)
I spoke to an account rep today and she says that we would only have to pay tax on 2/3rd of payments; that the after tax portion was like a Roth IRA.
I asked her if the income on the after tax portion was also after tax. She said no, it was just tax deferred. So it is not actually like a Roth.
So which of her statements is correct? Is the income after tax or tax deferred?
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I spoke to an account rep today and she says that we would only have to pay tax on 2/3rd of payments; that the after tax portion was like a Roth IRA.
I asked her if the income on the after tax portion was also after tax. She said no, it was just tax deferred. So it is not actually like a Roth.
So which of her statements is correct? Is the income after tax or tax deferred?
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
Alan
Apr 26, 2016, 5:32:33 PM4/26/16
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On 4/25/16 9:23 AM, Frustrated wrote:
> My wife has $90,000 in a TIAA 403B account. The statement says $60,000 is before tax and $30,000 is after tax. (we don't know how it got to be after tax, but that is neither here nor there)
> I spoke to an account rep today and she says that we would only have to pay tax on 2/3rd of payments; that the after tax portion was like a Roth IRA.
>
> I asked her if the income on the after tax portion was also after tax. She said no, it was just tax deferred. So it is not actually like a Roth.
>
> So which of her statements is correct? Is the income after tax or tax deferred?
>
The $30K after-tax amount is her basis. Pre-tax contributions and all
> My wife has $90,000 in a TIAA 403B account. The statement says $60,000 is before tax and $30,000 is after tax. (we don't know how it got to be after tax, but that is neither here nor there)
> I spoke to an account rep today and she says that we would only have to pay tax on 2/3rd of payments; that the after tax portion was like a Roth IRA.
>
> I asked her if the income on the after tax portion was also after tax. She said no, it was just tax deferred. So it is not actually like a Roth.
>
> So which of her statements is correct? Is the income after tax or tax deferred?
>
earnings grow tax-deferred. She will use Part I of IRS Form 8606 to
compute the tax-free portion of any distribution. The numerator in the
equation will be that $30K basis.
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