How do we pay taxes on severance pay?

We now live in Wisconsin. Two years ago we lived and worked in California. The place closed and we moved. Two days ago we recieved a check from the place and were told it was severance pay. We were also told we would get a 1099 for it at the end of the year. No taxes were taken out. What do we do? We don't want a fine for not paying on time.

1 answer  |  asked Nov 21, 2010 2:51 PM [EST]  |  applies to California

Answers (1)

Elisa Ungerman
I am not a tax attorney or a CPA - you need to consult either of those specialists for counsel, both for state and federal taxes. Generally, the answer is that severance is taxable because it is considered "wages" and "income", but whether and what depends on many factors.

posted by Elisa Ungerman  |  Nov 21, 2010 5:45 PM [EST]

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