Let’s just say they took over $3,000 out of my severance.
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36% or $36,510. Did the math and was within $400. Still hurt - a lot
How much they take out is not up to them. It's up the IRS. This would be considered a lump sum (like a bonus). Taxed at 22%. Any tax shortfalls or overpayments will be handled in April 2021.
Smart asses
Also severance is taken out up until you cap out at the yearly contribution limits - I think it was $18,500 this year.
$30k here and completely expected that. Simple math but it does s— nonetheless. Happy New Years and time to move forward for all of us!! 🤗
Also received my severance today in the bank and the pay stub came today in the mail as well. Kind of like an arrogant Christmas card to remind me of being laid off. So many taxes taken out. And why did they take 401k out if we are no longer employed for contributions? :/
You've obviously been following this board, surely you've read all of the posts where people have been talking about the taxes. People have clearly posted that the severance check takes taxes out and that it's taxed more like a bonus? You lost $3,000? I don't want to hear it. They took out $14,671 of mine. They could have given you a notice of termination on Day 1 with no severance package. Enjoy the little Christmas gift they gave you! ;)
Did you think severance was tax exempt?