TSP Loan questions:

[docpanic]

Hi:

Presently I have a TSP loan, but I would like to access more of my TSP funds to pay my federal taxes. The problems are:


I don't have the cash to pay off the TSP loan.
My credit rating is trashed following my expensive divorce.
Ideally, I would like to borrow the money to pay back the TSP loan and then pay back within 90 days after I have obtained a TSP loan that accesses my available equity.
Any ideas about any resources that someone in my position can utilize to solve this problem?

Thanks,
Doc

[JTH]

Don't worry, it's a new governement and paying your taxes are only required if you want to work directly for the president. :D

Seriouly though. I'd highly advise against using your longterm investment to pay off the feds for the short-term.

Perhaps you can get an extension or set up a payment plan with the IRS?

Best of luck and welcome to the forum.

[docpanic]

Thanks, JTH.

I certainly do understand about not using retirement funds for short term debt, but it appears now that I am paying myself more than my account is making due to the recent market downslide. My plan is to enter into a payment arrangement with the IRS if I cannot find a faster solution. It's just that right now, it seems to make sense to pay myself around 3% versus paying the penalties and interest the IRS may want.

I still need to know if any one has any ideas about how I might borrow funds to pay back my TSP loan in the short term so I can access those extra funds that are now available to me?

Thanks all in advance.

[DCguy]

if you get a loan from a bank, you pay them interest with your money after tax. if you get a loan from tsp, you pay yourself interest with your money after tax. I think the market's not gonna recover in the next 6 months.

[Scout333]

Doc, What type of loan do you currently have with TSP? I believe you can have one general purpose and one residential loan at the same time. Also, I believe there is a 60 day restriction once you repay a loan before you can take out another of the same type. Sounds like you are talking about a general purpose loan for which a 60 day delay would screw up your plan. Residential loans are for house purchases.

Suggest going to the TSP site and carefully review the frequently asked questions re loan program. Good luck!

[docpanic]

I know about the 60 day period. I was hoping to delay filing my taxes and then present the full payment when I have the loan situation figured out. The bigger deal is that I don't want to mess up the offer in compromise that I recently submitted. They want you to stay current in order to continue evaluating the offer. I am hoping that "current" can be adjusted to a later filing date.

[Scout333]

Good luck with the OIC. I understand those can be really tough to get approved. An extension might get you by for a few months but it is really only an extension to file not to pay. Don't know if that qualifies as being current or not for OIC purposes.

[wv-girl]

I know about the 60 day period. I was hoping to delay filing my taxes and then present the full payment when I have the loan situation figured out. The bigger deal is that I don't want to mess up the offer in compromise that I recently submitted. They want you to stay current in order to continue evaluating the offer. I am hoping that "current" can be adjusted to a later filing date.
It has been my experience that you can delay the filing of your taxes, but they still want the estimated $ owed on April 15.:(

[GUCHI]

i heard that ypu vcan borrow money from your own CSRS TSP Account for other than a primary residence or debt consolidation. ie vehicle loan ??? can anyone shed some light on this ??? I relieze that now is a very bad time to pull money from my account, but i'm just getting the facts now to make a move later.

thanks MB

[Scout333]

You can get a general loan with repayment period up to 5 years. Look on the Thrift Savings Website under TSP Features and select TSP Loan Program. There are a number of links for information on the program. Whether or not its a good idea that's another question entirely.

[GUCHI]

scout
thanks 4 the info.

guchi