How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Bill Your Own Question

Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3077
Experience:  EA, CEBS - 34 years experience providing financial advice
Type Your Tax Question Here...
Bill is online now
A new question is answered every 9 seconds

I am 56. Received a lump sum severance package this year and

Resolved Question:

I am 56. Received a lump sum severance package this year and want to know my options to reduce taxable income in 2009. Up until 9/1 severance date I had contributed to 401k at 12% level.
Submitted: 4 years ago.
Category: Tax
Expert:  Bill replied 4 years ago.
How much was the lump sum payment? What will be your gross income this year including the lump sum? Are you married? If so, does your spouse participate in an employer sponsored retirement plan?
Customer: replied 4 years ago.
I am a bit reluctant to share income details over the internet. Suffice it to say this will push us to the 38% tax bracket for 2009. I am married. My wife contributes to a 403b plan (she is a teacher) and participates in the state teachers retirement plan which is employer sponsored.
Expert:  Bill replied 4 years ago.

So assuming your AGI is in excess of $109,000 then you would not be eligible for deductible IRAs. If your wife is not maximizing her contributions to a 403(b) then she could increase her deferrals which will reduce her taxable income and your overall joint AGI. If she is over age 50 then she can defer up to $22,000. If she has worked there for more than 15 years then she may also be able to contribute an additional $3,000 catch-up depending on the amount of her total contributions over the years she has worked there. If her employer also offers a 457(b) plan then she could defer another $22,000 to that plan. However, with only 3 months left in the year then she would be limited to deferring up to her remaining salary income for the year.

 

If you intend to obtain another job or start your own business then you may be able to defer part of your salary to another employer's plan or start a retirement plan for your business.

 

If you itemize deductions you may consider prepaying certain expenses this year so that they may be deductible this year (real estate taxes due in 2010, doubling up charitable contributions, etc.). If you have losses on investments, then you could sell those investments and deduct up to $3,000 of losses that exceed your gains against your other income.

Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3077
Experience: EA, CEBS - 34 years experience providing financial advice
Bill and 8 other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    566
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    566
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3046
    10+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3103
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    CPA, CMA, CFE

    Satisfied Customers:

    3257
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2679
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2219
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.