Are we looking at the government taking around 30% - 32% of the Severance package?
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Recently let go package was 120K got a direct deposit for 84K. Not including my vaca and bonus. Bonus yet to come. Vaca was a separate check a little over a couple grand.
@W6MQY0b-1lka, yes, taxes were paid for:
Fed Withholding
Fed MED/EE
Fed OASDI/EE
Lucky I live in Texas, no state taxes...
I did listen in to the noon calls, but only a few times. I still have a job to do and am always busy, but would listen in the background at times. I did submit the question and they said to go to payroll. I did call payroll and although they said it would be coded differently, it still didn't answer for sure how social security sees the income. It's no big deal, it doesn't matter, I'm still going. I was just curious for the person who already left if 2017. I just wanted to know how it affects my social security wages which determines my future social security income. There is no need for name calling.
As xbb says, in many ways it's not the withholding that matters, you will get back any overpayment when you file (not ideal because of the opportunity cost, but not too bad). If you quickly get a well-paid job, you may need to make estimated tax payments to avoid underpayment, but then that's not a bad problem to have.
Bottom line,
They will include SS and Medicade/Medicare taxes, and any state and local taxes.
to the person who wrote "does the buyout count as income for SS purposes?". Did you not sign in to any of the HR calls at noon they've held? Did you not write in your question to the HR mailbox so that someone of knowledge could answer that ? Now, the calls are done, and you pose a question like that here - stupidity. Think about it. Your severance is PAID OUT in 2019.
Does the buyout count as earned income for social security purposes? So when i get my SS statement that shows how much i earned every year of my life, will it show the buyout for 2019 or $0 if I don't work anywhere else?
"My last day was 12/29/17, severance paid out in Feb 2018, 29.83% in Federal taxes was taken out."
Does the 29.83 include FICA/Medicare, because if so that's about right. 22% supplemental and 7.65 or so the rest
Rule of thumb: take withholding amount on check and submit that same amount to IRS or squirrel away until tax filing in 2020. Essentially taxed at highest tax bracket, no bad surprises when filing 2019 taxes. This all assumes you find another job and will have a huge bump in 2019 income. YMMV.
you can change your W4 for state and federal to exempt and then based on your tax liability based on your tax factors as long as you pay your liability by April 15 of following year you are good.
the new tax guidelines are much lower now than before. they mat take a high tax percent out but at the end of year you will get back much of it.
I suggest you do your research at this point. There's b---s---, then there's thelayoff b---s---.
My last day was 12/29/17, severance paid out in Feb 2018, 29.83% in Federal taxes was taken out.
Withholding is different from actual taxes. Actual taxes depend on how much total you earned in that year
In addition to the 22%, I'm guessing it will depend on your state tax as well.
The federal supplemental tax rate is 22%