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Level 1
posted Oct 25, 2023 3:08:48 PM

Laid off this year with severance package

I was laid off in the spring of 2023 and had a severance package for several months. I did not file for unemployment during this time (and do not plan to). My spouse is still working and my oldest child had a summer job. With this basic knowledge, I'm curious what I can do now to get a preview of what my tax situation might be? Another way to ask a more general question, what implications do layoffs have on taxes?

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1 Best answer
Level 3
Oct 25, 2023 3:27:19 PM

J hibbets  good afternoon! A severance package would be considered taxable and your employer should have withheld federal and state taxes on this payment and you should receive a 2023 W-2 from your.   Turbo tax has an excellent program Tax Caster that will allow you to get an estimate  of your 2023 taxes .  In recommend you use this program to get an idea of what your 2023 taxes will look like.   The 2023 updated tax caster program should be available in  to use early November 2023. The overall implications of a layoff is that your income in most cases will be less subject to the amount of severance you received.

2 Replies
Level 3
Oct 25, 2023 3:27:19 PM

J hibbets  good afternoon! A severance package would be considered taxable and your employer should have withheld federal and state taxes on this payment and you should receive a 2023 W-2 from your.   Turbo tax has an excellent program Tax Caster that will allow you to get an estimate  of your 2023 taxes .  In recommend you use this program to get an idea of what your 2023 taxes will look like.   The 2023 updated tax caster program should be available in  to use early November 2023. The overall implications of a layoff is that your income in most cases will be less subject to the amount of severance you received.

Level 1
Oct 25, 2023 8:46:43 PM

Wow, I feel like I gave you a softball to plug the tax caster app 🙂 In all seriousness, thank you so much for the thoughtful response. This will definitely help me be more prepared for tax season. 

 

Thanks,

Jason