Public Safety Officer & 1099s
I am a retired federal Public Safety Officer (PSO)and am having trouble with my two (2) 1099s. The current instructions for this part of the TT program needs further clarification.
First, I enter my CSA1099-R (pension/annuity) info into TT, checking the boxes to indicated that some of the earnings are from employment as a Public Safety Officer, and that over $5,000 was taken out of my paycheck for medical insurance. The program automatically sets aside $3,000 of the insurance as exempt.
But, when I enter info from my 1099-R for my Thrift Savings Plan (TSP) account, the TTax program again asks if any of the RMD in the TSP distribution was from earnings as a Public Safety Officer. So I answer YES because 5% of all my earnings as a PSO were invested in the federal TSP, which is a 401-K program. However,when I check the YES box, my return fails the REVIEW check. By checking YES, the program adds another $3,000 into the exempt category. This makes the total exemption $6,000, but only $3,000 is allowed by IRS.
So, I have to answer that question as NO in order to pass the review. It took me quite a long time to figure this out.
Since some of the TSP was actually from earnings as a PSO, it would be nice to have that part of TT rewritten for clarification.