In November 2022, I left my job and received my vacation balance payment with my last paycheck. This increased my tax bracket and tax pymt incorrectly. What can I do?

You may be able to contribute to an IRA before April 18, 2023 to reduce your tax liability.  Beyond that, the income you received in 2022 is what it is, and you have a tax liability for income received in 2022.  Your tax bracket and tax liability is not incorrect.  More income = more tax.

Unfortunately, vacation pay would be considered taxable income and would factored into your adjusted gross income.  As xmasbaby0 stated, you do have the option of contributing to a Roth IRA before April 18, 2023 to reduce your taxable income.  

 

With Roth IRA's there are a few eligibility limits.  For single taxpayers in 2022:

• You can contribute up to $6,000 to a Roth IRA, or up to $7,000 if you are 50 or older, only if your income is $129,000 or less.
• You can make a partial contribution to a Roth IRA if your income is between $129,000 and $144,000.
• Once your income tops $141,000, you are not eligible to contribute to a Roth IRA.

For married couples in 2022,

• $6,000 or $7,000 contributions can be made for each spouse, if income is under $204,000.
• The right to make contributions is gradually phased out as income rises between $204,000 and $214,000.

For more information see the link below:

 

Boost Your Retirement Savings

 

@reneeskaf