@GregAllum11 wrote:
No legal action. I signed a mutually agreeable severance agreement, was a senior exec at the organization they decided to go a different direction and agreed to pay the equivalent of 3 months salary.
No taxes have been paid on this as it was a direct deposit into my bank account.
Severance is required to be on your W-2, and they are required to withhold their share of FICA and medicare tax.
Start by sending a certified letter asking them to issue a corrected W-2.
If they refuse, you can file by reporting this as "income that was not on my W-2 but should have been". You will pay the employee share of social security and medicare, but not self-employment tax. You will also owe income tax, of course, and depending on the amount, you might owe a penalty if you did not make an estimated tax payment.
I want to double-check the procedure for adding this type of income so it doesn't double your regular income as well. I will try to get back to this tomorrow.
