Paying On The Severance
John doesn't know how to handle his severance package as far as the tax goes.
QUESTION: John received a severance package in January and wonders if that goes on last year’s taxes or this year.
ANSWER: That depends on your employer. You obviously want to pick it up in 2009. Most likely, they put it in a W2 or a 1099 for 2008. It depends on which year the employer picks to issue the 1099 or W2 for that severance.