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Live And Learn 06-12-2013 02:14 PM

Quote:

Originally Posted by rodi (Post 1328711)
I hadn't thought about the tax consequences of severance... off to go research.

it can be summed up in one word .... PAINFUL !

almost there 06-13-2013 07:49 AM

"tax consequences of severance... off to go research"

Its going to be bad this late into the year. Not much can be done about that. The yr of un used sick time? I will get zero as I am under 55. In the past things were better with this Co. They offered much more in cases like this. 5-7 yrs added to age plus yrs of service in addition to the check. But this is the new way of doing business.
I am just happy to have prepared all through the yrs.
No dark cloud here.......:dance:

Now for that appointment with the Tax guy tonight......
And yes, its going to be ugly / painful.......
Un less I can spread it out over a few yrs. But am not sure there is much chance of that........:greetings10:

scrabbler1 06-13-2013 08:10 AM

Quote:

Originally Posted by RE2Boys (Post 1328378)
Just be careful to avoid putting yourself in a penalty situation with the IRS and state due to under withholding. I usually go for the safe-harbor, make sure my withholding and estimated tax payments at least equal last years total tax as listed on second page of 1040.

I received a large, lump-sum payout from cashing in my company stock when I left my company in late 2008. I carefuly read the safe-harbor rules in the instructions for estimated taxes to make sure I avoided penalties and was able to delay he payment of most of the added income taxes due until the following April. In fact, I used the same safe-harbor rule you described, but only for federal taxes. For state taxes, it turned out better to pay them in the year I took the payout because I was able to deduct them right away on my federal return instead of waiting a year. (Almost There, please take note of that in your tax research.)

Lsbcal 06-13-2013 09:03 AM

Quote:

Originally Posted by almost there (Post 1329046)
"tax consequences of severance... off to go research"

Its going to be bad this late into the year. Not much can be done about that. The yr of un used sick time? I will get zero as I am under 55. In the past things were better with this Co. They offered much more in cases like this. 5-7 yrs added to age plus yrs of service in addition to the check. But this is the new way of doing business.
I am just happy to have prepared all through the yrs.
No dark cloud here.......:dance:

Now for that appointment with the Tax guy tonight......
And yes, its going to be ugly / painful.......
Un less I can spread it out over a few yrs. But am not sure there is much chance of that........:greetings10:

Everybody's tax situation is different. I'd just make sure to do some multi-year planning. Before SS kicks in you may want to do Roth conversions but not this year if you have enhanced income -- maybe. Maybe you want to restructure your portfolio and sell some loosing positions. Having a plan even if it's updated might be superior to just looking at one year at a time.


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