For those taking the VSP offer, be aware that your accrued vacation will be taxed at the same rate as STI because Verizon considers it a bonus. Just something to be aware of.
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I always laugh at this “higher taxed” nonsense. They take more now and you get it back during filing time. Not a terribly bad thing.
You will pay the same tax if you take it now or get paid out in the end. The only thing that might change is the amount of your refund if you choose to have it paid out.
The best advice is this...do not take any vacation or use very little if you are going to take the VSP. You are pretty much a freebird now. That is significant money once you are out the door. And as far as the tax rate...even if you get taxed 37% now you will get some of it back if you end up being in the 22% or 12% bracket based on your yearly income.
I think all this person is saying is.. take your vacation now if you don’t like the idea of getting it paid out with taxes withheld.
It's all ordinary income to the IRS.
Won't pay different taxes, will just be withheld at a different rate...
They are not saying it won’t be taxed they are saying people need to be aware of how it’s taxed. Regular pay is taxed at a much lower % than pay that is considered “bonus”. Talk with HR. I am under the impression that severance is all taxed as a “bonus” not regular pay.
Why wouldn't it be taxed? It's the same as work hours. Pay vacation bonus severance payout, it's all income.