2006-10-26 03:33:55 · 4 answers · asked by marie s 1 in Politics & Government ➔ Government
Depends on what is in the severance package. If it is money, it is taxed like any other pay.
Phoenix is wrong....all your income is not taxed at one rate.
2006-10-26 03:36:21 · answer #1 · answered by capu 5 · 0⤊ 0⤋
Usual income tax. As this is on a sliding scale, the amount of each lump sum you receive will determine which tax bracket it falls into. For example, while your regular $3000/mo. may fall into a 25% tax, your $12000 single payment from your severance package will fall into a much higher tax range. However, when you file your taxes at the end of the year, depending on how much money you make in that year, you will probably get some of that tax back as all your income will be taxed at one rate in the end.
2006-10-26 03:41:56 · answer #2 · answered by Phoenix, Wise Guru 7 · 0⤊ 1⤋
The same as any other income. You may have a higher withholding rate because it came in all at once, but at the end of the year it will be just part of your income.
2006-10-26 03:36:51 · answer #3 · answered by Alex 6 · 0⤊ 0⤋
Same as regular income, I thought.
2006-10-26 03:36:05 · answer #4 · answered by jonjon418 6 · 0⤊ 0⤋