Temujin_12
Member
Cash: $ 2.80
Posts: 12
Joined: 04 Feb 2010
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Taxes and severance |
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I was laid-off at the beginning of the month. My company gave those laid-off a 6 month severance package. Anxious to get back to work so I can pocket as much of that severance as possible, I aggressively interviewed and I'm starting a new job that is more exciting and pays better next week.
What I'm wondering is what will the taxes look like on that severance? I have invested some of it into my wife's photography business, but that leaves me wondering what to do with roughly 80-85% of it.
In terms of liabilities, all I have is two cars loans (approx. 16K worth) and my mortgage (which I am currently underwater on but we're comfortable staying in for a long time). Putting most of it into my home would put us above the water line on our mortgage, but I'm hesitant doing that when in 10-15 years (?) the market might just do that for me.
What is the best thing to do with this money in terms of tax liability or in general?
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Sat Aug 27, 2011 1:17 am |
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prioritytaxgroup
Contributing Member
Cash: $ 5.05
Posts: 25
Joined: 20 Jun 2014
Location: usa |
You won't avoid tax entirely. You will pay 20% on the company's profits – in this case everything going into the company, and 10% "entrepreneur's tax" on the amount left in the trading company when it is liquidated. But say your take home pay was £200,000 a year over the three years, your bill would be substantially lower than had you taken the lot as income
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Fri Aug 29, 2014 5:25 am |
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