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enough with the fight..lets get back to GOT peeps
Thursday tripmare. Hate you O'hare.
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As income, duh
lol OP not sure what your deal is. All ordinary income is taxed in the same manner - wages, severance, unemployment, whatever
I think the miscommunication here is that it will be *withheld* at the supplemental wage rate, but ultimately taxed as ordinary income like any other wages.
Income is income, unless you earn more than $1M in “supplemental wages”. Subject to your tax rate.
It should be taxed at the flat supplemental rate of 22% for federal (state rules vary). Payroll is only allowed to tax you using the aggregate method (normal W4) if you are also receiving regular wages.
https://www.irs.gov/publications/p15
Regardless, of payroll tax method used you may still owe money OR receive money back when you go to file your annual income tax return. This can easily happen if you had any outside (non payroll) income or tax credits/deductions that change your effective tax rate. It can also happen if the supplemental rate is lower than your effective tax rate.
TLTR version: With either payroll tax method, you’ll end up paying the same tax amount when you file your tax return.
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Severance is considered supplemental wages, so you’re taxed 22%.
So then why did Accenture only pull out 10%? I never knew corporate accounting to be so questionable until I got my tax return. My numbers don't add up.