Thread regarding Bank of America layoffs

Sounds like an HR discussion making everything smell like a rose for laying people off or firing people based on market conditions and mgt not managing. To help clarify- this is not the case but merely someone pointing out you can save yourself some aggravation.

A tip I received was to change 401k deductions to 0 so you don't have whatever % coming out of your severance.

Good to know. Thank you.

#GOLD

Minimizing taxes on a severance package

Tax Deferrals

Severance package recipients can take steps to defer income tax on some of the money they receive. This is especially useful for workers who lose their jobs close to retirement. Placing money in an annuity or individual retirement account creates the opportunity for a tax deduction. Although the severance income is taxable, it also counts as a deduction from taxable income if it goes into a qualified, tax-deferred retirement plan.

Maxing out such contributions will minimize the tax impact of a severance package and allow the recipient to pay taxes at a lower rate as the money is withdrawn

Source: http://smallbusiness.chron.com/tax-options-severance-packages-23917.html

great tip! wish I had thought of that last year!