Does anyone know how much of your lump some payment is taxed? Example if your severance is 50k would I receive 25k or more/less? Thanks
2 replies (most recent on top)
To follow up on the last poster being put into another tax bracket is a good thing and never negative.
For the uninformed only the money earned above the new bracket is taxed at a higher rate.
Its reported as ordinary income on your 1040. Its taxed typically the same rate as your bonus is. So maybe 30%. Just be aware that next April, it may put you in a different bracket, as its a large lump sum.