Just found out my date of 9/13. Super happy, but how much tax do they take out? Thank you in advance
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From one of the docs on the severance portal:
Unless you claim tax exemption, lump sum payments are subject to a supplemental rate for Federal and state taxes. As the IRS requires, lump sum payments are taxed at a 22.0% supplemental rate for Federal tax purposes. Additionally, lump sum payments are taxed at the applicable state supplemental rate. This varies from your regular paycheck, which is taxed based on your annual salary and W-4 exemptions. Usually, your normal paycheck is taxed at a rate lower than the 22% supplemental rate.
22% if you read the details. HR gave a lot of valuable information.
@uhz+1tZy1oie oh shut up sore loser
My tax guy told me if I get a September date to have $20,000 in ready cash to pay Uncle Sam in April - just in case.
Work with a Accountant to determine your estimated tax for 2025 as well.
Don't worry about what they will take out, but moreso what they will su-k out of you in 2025 tax time. Some will go into the 32/35% bracket due to lump sum as well as 2024 already worked income. That can be a potential 78 to 110k tax liability. Disclaimer: not a tax man, just basic online calculator.
Maybe it's a good think you are leaving - you keep coming to this board for answers instead of doing the work yourself.
It all goes to a good causes: illegal aliens, wars that have nothing to do with America, military industrial complex etc, most importantly all the corrupt politicians
Made the life changing decision to take the VSP, but didn’t bother to workout how much you would get in the bank!
Amazing.
You might have 5% left after the Taxman is through with you. You're working for no one but him.
Alot
22%
Fed - 22%
State - Your state tax rate
Social Security - 6.9%
Medicare - 1.45%
You still may owe tax on your 2024 return.
They do not text your lump sum. If they give you 66,000 up front that will be taxed before you even get to touch at whatever the prevailing tax rate is and the other 50. If they disperse it over 4 years there will be taxed each month as regular income tax The lump sum will not be taxed as long as you roll it into an IRA inside of 90 days
You're going to take it in the shorts from the IRS
Seriously?....by now you should've known