They quoted my around 9500 for my severance payout but when the deposit hit, it was 6500. Was the quote pre tax?
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Has anyone gotten a breakdown of the severance in writing? I cannot reconcile the amount with what I received with the amount my severance agreement said I was entitled to even when accounting for taxes/etc. I have requested a breakdown several times but have yet to receive anything from Allstate.
Lump sums are 22% Federal. If your actual rate is higher or lower, it will be handled when you file in April. So if your effective rate is 15%, you get the difference back at filing. If it's higher, you have to pay in. To get an idea, you can look at your effective rate that you paid last year. It should be shown on your return if you use tax software.
Severance is 22% federal
2% social security
45% Medicare
Plus state taxes if you have any
That i what they say....my and other's pay stubs for the severance say otherwise.
Severance is 22% federal
- 2% social security
- 45% Medicare
Plus state taxes if you have any
The severance is taxed at a higher rate like a bonus since lump sum so it ends up being less than it would on a bi-monthly paycheck. They said they were taxing federal at 22% which has been proven by many as bullsh×× as most have seen closer to 30% for federal not counting any state income tax where applicable. All of us affected on my team were around 30% for federal and some even had 401k still taken out as well.
It still comes out to a little less than I would net post tax for ten weeks though. Anything else they hit you for on the actual payout?
Yes, it was pretax