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.

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