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In 2010, I received severance of about 20 weeks. A huge chunk went to taxes but it made very little difference at the end because I already had another job lined up (with a signing bonuses). So even though I overpaid in taxes, my income for that year was also higher than normal and I only got a small refund at tax time.
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Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Originally Posted by almost there
Severance check, would you add dependants to avoid overpaying tax's
or leave it alone?
Getting an additional 56 weeks pay, 10 months into the tax year.
The gov will probably end up with about $60k on that check.
Make a change , or leave it & just wait to get the excess back at tax time?
Anyone here been through this?
If the employer offers a 401k I would top it up to the max for the year out of the severance so the taxable portion of the severance would be lower.
Other than that you could sketch out your taxes for 2012 with the severance income and see what additional amount you need taken out beyond your regular withholdings. IIRC on lump sum payments like that they typically withhold 20%, but if you talk with your payroll or HR there may be other options.
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Mega corp. They have reasons for doing it.
Total lay off in the thousands......
2 weeks pay for every year of service. Max 52 weeks.
(Without the cap it would be 64 weeks total. Plus I loose a yr of un used sick time... gone...) But am just happy to get what I can and get out.
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