I retired in January 2019 as a federal civil servant. I was able to cash in on my accumulated annual leave/vacation time which resulted in a fairly large check. I also stated receiving monthly pension checks as a result of my retirement. Taxes were taken out of my large check but apparently not enough because after inputting all my data into TT, it turns out that I now owe and substantial amount of federal taxes, i.e. over $16K. Can this be possible? It appears that U.S. Government as well as TT treated the large check I received as regular income as the amount of the check was reported in a W-2 form. Can this be possible? Does this sound correct? Is there anything I can do to lower this tax burden at this point? According to TT it does not qualify for IRA deduction as the amount of "income" was over the threshold amount.
