I was recently let go due to business needs and I of course get the severance lump sum. How long did it take for you all to get your severance after signing? I signed literally midnight the day they told me to. I was told it can take up to 21 days but I know it can be less. Also was it taxed badly?
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An HSA contribution can also reduce taxable income, but depends on which medical plan you have.
@6fce+1jvZ6wju - ideas
If spouse is employed or you have gotten a new job, contribute the max to the 401k until EOY, that is pretax so reduces the income level. Live off the severance to make up the difference being withheld.
If not able to do that, contribute the max to an IRA for the year for both spouses, talk to advisor on how much you can do.
talk to an accountant to see if anything else you can do, but that is all i can think of.
To the commenter who mentioned things one can do to lower tax liability on severance, what are those things?
Your last day as in when they told you, you were laid off or the date they gave you that you could sign for the check and apply for unemployment?
2 weeks after my last day.
About a month. Around 35% tax withholding, but remember, that is not necessarily 'Your Taxes'. You will possibly get some back when you file. There are also probably some strategies you can employ now to lower what tax you will pay.
Mine came in one pay period, but I shipped my laptop back 5 minutes after I logged off. Taxed same as the rest of my pay, though without withholdings for things like insurance or 401k
I found out I was laid off after I asked HR why I had received an unexpected bank deposit from Fiserv.
Taxes will be corrected depending on your total income when you file.
I got mine in 2 weeks. 34% Taxes taken