Severance Pay

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  • arlo
    Senior Member
    • Feb 2008
    • 285

    #1

    Severance Pay

    Client received $35,000 is servance pay for 2012. Is there a way he can
    average that income over a couple of years?
  • Golden Rocket
    Senior Member
    • Jul 2007
    • 519

    #2
    Don't See How Arlo

    He would have to RECEIVE it in two different years, or at least split the pay such that he receives such an effect split between W-2s for two different years.

    If this has already happened in the past, I'm afraid the goose is cooked.

    That's the misery of W-2s -
    1) They are not in your control
    2) Neither you nor the client can correct them if they're wrong
    3) No tax planning opportunities

    Comment

    • Burke
      Senior Member
      • Jan 2008
      • 7068

      #3
      Originally posted by arlo
      Client received $35,000 is servance pay for 2012. Is there a way he can
      average that income over a couple of years?
      Income Averaging went away many, many years ago. (Maybe 1986).

      Comment

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