I plan to take my severance by Dec 31st and start unemployment in 2016 and pay lower taxes. Any thoughts?
2 replies (most recent on top)
Depending on the country and/pr the state the unemployment varies. For US employees unemployment is $11,000 estimate. Severance varies also depending on the country and the years of service. Delaying severance until 2016 defers the income until 2016 and reduces taxes for 2015. If you do not need the money to survive defer severance and unemployment. Otherwise taxes are secondary if you need the money.
That's not a good plan. The more money you earn in one given year, the higher your taxes. You will pay lower taxes if income is more spread out. The only way it would make sense to collect severance this year is if you get a job at a higher salary by next year. But it doesn't sound like you plan on getting another job if you're already banking on unemployment.