Severance Pay Tax Classification

Summary

Severance pay is generally reported on a W-2 for employees. If its reported on a 1099-NEC, it might be considered self-employment income. Consulting a tax professional is advisable to clarify your tax obligations. Since you signed an NDA and accepted a lump sum, understanding the tax implications is crucial.

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thank you
You're welcome. If you have any other questions or need further guidance, feel free to ask. I'm here to help!
God Bless you, truly appreciate it
Thank you for your kind words. I'm sorry to hear about your situation.
To better assist you, could you please confirm if you are located in Florida? This helps ensure the information provided is relevant to your local laws and regulations.
Yes
Thank you for confirming. Since you accepted the lump sum payment and signed the NDA, it's important to understand the implications:
- Generally, severance pay should be reported on a W-*.
- Reporting it on a *-NEC suggests it's considered self-employment income.
Consult a tax professional for specific advice. If you need further assistance, please let me know!
I will because the check says FOR: Final Payment
Thank you for sharing your details. Given your situation:
- Severance pay for employees is typically reported on a W-*.
- Reporting it on a *-NEC might indicate it's considered self-employment income.
- Consult a tax professional to clarify your tax obligations.
If you need further legal advice, please let me know!