I was a cash office associate for over 27 years and received my severance check on January 11th The only deduction from a severance check are huge taxes which was 39.5% of the gross amount. I always claimed 1 as my federal and state deduction but I’m not sure if you increase your withholdings prior to being gained out of the system if this would help in the same way that it did for our Samsshare checks. I guess it won’t hurt to try. Best wishes to everyone!
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Just a little FYI raising your deductions does not work on Sam’s share/bonuses or the like. Severance maybe but bonuses are always taxed at 39.9% no matter the exemptions or he company.
There’s a difference between a W-2 (exemptions) and a W-4 (allowances). W-4 tells your employer how much taxes you want them to withhold on your paycheck and a W-2 only tells the IRS what you earned for the year and the taxes that were withheld based on the number of exemptions you will truly claim at the end of the year. You need to fill out a W-4 and have PTC enter it in the system when you want to change the amt of taxes you want withheld. Make sure they do this. This way your employer withholds whatever amount (less or more) you should request. You need to fill out a W-4 every time you want to change the ant of taxes you withhold.
The W-2 exemptions will show the correct amt that should be withheld (having over paid or under paid) based on the number of exemptions you thought you were going to claim vs what you had withheld based on your W-4.
I hope this helps.
I thought the Fed taxes max taken out was 25 percent. Why are the Fed taxes taking out more?
It doesn’t matter what you claim, I had a friend who always claim 10 expemtions while working so she had no taxes taken out, BUT when she received her severance check they took out 24% ...
I don’t claim any dependents so when do I change my 401K, as soon as they tell me my position has been eliminated? I’ll then get 60 days at the new amount as well as when I get my severance pay, right? Can I claim as many dependents as I want even though I’ll claim 1 when I file my taxes?
Up your deductions. Who cares if you claim 2 or 8? Also keep your 401k at 6%. If you have a $10,000.00 severance 6% is
$600 in your account plus the match from the company giving you
$1200. Or would you rather give it to the tax man?
RvpGmWb-lnt. that was a consideration but when i looked at how much with severance and pto, which was considerable having rolled over 80 hrs and never took any in 2017) i wasn’t going to run the risk of owing irs. and i’m pretty sure i would have. i was that long term making too much they wanted gone. no regrets for sure
I do that very same thing for any bonus check we get. PTO, Sames Share etc.
Then change it back to 1 exemption after i get the check !!! More money in my pocket now.
Should have claimed exempt before you left to make sure that NO federal taxes were taken out !!!!
i too was a cash office tl. they took 30% i changed my exemption to 2 from 0. i figured i needed more in the check now and take what comes at tax time. we always get a refund so the refund would be less. so what. either way you pay taxes, now or later. it works the same at sam’s share time. pay now or pay later. i also cut off 401 at the end.
Thanks for the info!