Tax Prep and Planning for Federal Employees and Retirees
Serving GS, SES, law enforcement and postal employees across Northern Virginia from our Manassas office since 2006
Keep More of Every Paycheck and Every Pension Check.
Tax Wise Financial Services prepares taxes and plans year-round for current and retired federal employees in Manassas, Prince William County, Fairfax, Loudoun and the greater DC area. Federal pay looks simple on a W-2 and is not. We plan around the Thrift Savings Plan (traditional versus Roth contributions, the 5% match, catch-up contributions after 50, and the rule that lets you withdraw penalty-free if you separate in or after the year you turn 55, or 50 for law enforcement and firefighters). We handle FERS pension taxation using the Simplified Method so your after-tax contributions are recovered correctly, the taxable FERS Special Retirement Supplement, FEHB and FSA pretax elections, and the lump-sum annual leave payout that lands in a high bracket in your final year. For employees affected by RIFs, deferred resignation, VSIP buyouts or early retirement, we project the severance year before the check arrives. If you live in Virginia and work in DC or Maryland, we apply the reciprocity rules so you are not filing or paying in the wrong state.
Proof You Can Trust.
Federal returns go wrong in predictable places and we check every one: TSP distributions coded wrong on the 1099-R, the pension exclusion ratio never calculated, Social Security and FERS taxed together in a year a spouse still works, Virginia’s age deduction missed, and a Roth TSP rollover reported as taxable. You receive a written retirement income projection showing federal and Virginia tax by year from your separation date through RMD age, plus a withholding plan for your pension and TSP so there is no April surprise. [Insert anonymized case: e.g. “A GS-14 couple retiring in 2025 cut their first-year tax by $X by sequencing TSP withdrawals and the annual leave payout across two tax years.”] Premium packages include IRS and Virginia notice handling and audit protection. Transparent pricing and a 3-business-day response promise.
Wins This Year, Not Someday.
In the first 30 days we pull your latest Leave and Earnings Statement and TSP statement and fix your withholding so the refund or balance due is close to zero. If you are within five years of retirement we model the retirement date itself: retiring in late December versus early January changes which year the leave payout is taxed in, and that alone can be a four-figure difference. We decide whether to move TSP contributions to Roth while your bracket is lower, whether a partial Roth conversion makes sense in the gap years before Social Security, and how to coordinate a working spouse’s income. If you have a side business, rental property or consulting income after retirement, we structure it so it does not push your pension into a higher bracket.
Fast response times.
Our secure portal and smart organizer, built for federal households, ask only for what we need: your W-2 or 1099-R from OPM, TSP 1099-R, SF-50 if you separated this year, FEHB and FSA statements, Social Security SSA-1099, and your prior-year return. We know the forms and the acronyms, so you are not explaining what a VSIP is to your accountant. Virtual appointments are standard for W-2 and pension returns, and our Manassas office is open Saturdays during tax season for anyone who prefers in person. With 20% to start and the balance at delivery, you see our work before paying in full.
Frequently asked questions
Is my FERS pension taxable?
Yes. The portion funded by your after-tax contributions is recovered tax-free over your life expectancy using the Simplified Method. The rest is ordinary income. Virginia taxes it too, though Virginia offers an age deduction of up to $12,000 after 65 subject to income limits.
When can I withdraw from the TSP without the 10% penalty?
If you separate from federal service in or after the year you turn 55 (50 for law enforcement, firefighters and air traffic controllers), TSP withdrawals avoid the 10% early withdrawal penalty. The money is still taxable. Rolling to an IRA before 59½ gives up this exception.
Are federal buyouts and severance taxable?
Yes. VSIP payments, severance pay and lump-sum annual leave payouts are wages taxed in the year paid, usually with 22% federal withholding, which is often too low for a high-income final year.
I live in Virginia and work in DC. Where do I pay tax?
Virginia and DC have reciprocity for wage income, so you pay Virginia tax on your federal salary and file only in Virginia. Maryland has the same arrangement with Virginia. Non-wage income like rentals can still create a filing in the other state.
Should I contribute to traditional or Roth TSP?
It depends on your current bracket versus your expected retirement bracket. Many mid-career GS employees are better in traditional today, while early-career employees and those expecting a pension plus a working spouse in retirement often benefit from Roth. We run both scenarios.
