IRS Publication 721: Tax Guide To U.S. Civil Service Retirement Benefits


DEFINITION of 'IRS Publication 721: Tax Guide To U.S. Civil Service Retirement Benefits'

A document published by the Internal Revenue Service (IRS) that provides information on income tax rules for individuals who have retired from federal service. Retirement benefits for federal employees are paid by either the Civil Service Retirement System (CSRS) or the Federal Employee Retirement System (FERS). IRS Publication 721 covers survivor benefits, thrift savings plans, rollovers, federal estate taxes and the Simplified Method for calculating annuity benefits.

BREAKING DOWN 'IRS Publication 721: Tax Guide To U.S. Civil Service Retirement Benefits'

Part of the benefits paid out is tax free, because they are contributions made by the employee, while the rest of the benefits are considered taxable. The tax-free part is a fixed number; the taxable part is the difference between the full amount and that which is not taxed.

  1. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  2. Federal Employee Retirement System ...

    A system that became effective in 1987 and replaced the Civil ...
  3. Thrift Savings Plan - TSP

    A retirement savings plan created by the Federal Employee's Retirement ...
  4. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  5. Civil Service Retirement System ...

    A system that provided the retirement, disability and survivor ...
  6. Crowding Out Effect

    An economic theory stipulating that rises in public sector spending ...
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