If you work for Uncle Sam, check your W-2 form. Some payroll offices have incorrectly included 1987 tax-deferred employee contributions to the Thrift Savings Plan as part of gross income on the earnings statement forms.
For some high-income workers, the overreported amounts could inflate their taxable income as much as $7,000.
TSP money, which includes contributions from workers, the government and any earnings, is tax-deferred. Workers don't pay taxes on it until they withdraw funds.
More than a million U.S. workers now have TSP accounts, and for most there is no problem. Money they've contributed via payroll deduction is taken out before Uncle Sam takes his regular bite. So if you make $600 every two weeks and put $60 into the TSP, you are taxed on only $540. That's how it is supposed to work.
But because of some glitches in some agencies, some employees have received W-2 statements for 1987 that include their TSP contributions as part of gross income. In some cases, that could inflate their taxable income by 10 percent or more. Tax reform is bad enough without that.
Federal workers who got an inflated W-2 form showing TSP contributions as part of their gross taxable income should get an amended statement from their agency payroll office. Otherwise they will pay more taxes -- on income that is supposed to be tax-deferred.
On the Outs
Former Office of Personnel Management director Donald J. Devine was one of two top campaign aides bounced last week from the presidential campaign of Sen. Robert J. Dole (R-Kan.). He had been working as a $5,000-per-month consultant. He was fired along with consultant David Keene as part of a power struggle with campaign director and former labor secretary William E. Brock. Devine was unpopular with many federal workers because of civil service changes he proposed while heading the OPM. But he has a big following in conservative political circles and gets high marks as a campaign strategist, meaning he could wind up back in the Dole campaign -- perhaps in a job where he doesn't have to ride on the same airplane as Brock.
About 300 National Federation of Federal Employees union chiefs will hit Capitol Hill this week for a series of meetings with legislators and top aides. They want higher federal pay, improved fringe benefits and safeguards for the drug-testing program. NFFE will hold a joint rally Tuesday at the Capitol with the National Treasury Employees Union to push for Senate passage of a bill to give civil servants more political freedom. House Post Office and Civil Service Committee Chairman William D. Ford (D-Mich.) and Sen. Barbara Mikulski (D-Md.) will meet with NFFE leaders.
VA Medical Care
Veterans not exempt from the Veterans Administration's income means test will have to pay for part of their VA medical care if they have incomes of $21,111 or more for singles or $26,389 for married persons with one dependent. Congress imposed the means test in 1986. The new higher ceiling is a cost of living change. Veterans with service- connected disabilities are not subject to the means test for free care.