Q. When I retire, I will have 36 years under CSRS. I have tried reading on the tax-free annuity part on the 1099-R. I will fall under the simplified method, and the chart for me shows a $310-a-month figure. I multiply this by 12 to get my tax-free annuity figure. What do I subtract this off of, and what will it do for me?
A. Under federal law, a portion of your annuity is tax free because your already paid taxes on the retirement deductions that were taken from your salary while you were working For a better understanding of how the process works and what portion of your annuity will be tax free, go to www.irs.gov/pub/irs-pdf/p721.pdf and download a copy of the Internal Revenue Service’s Tax Guide to U.S. Civil Service Retirement Benefits.