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Financial Planning / Tax Strategies


Subject:  Re: Any Tax Relief Here? Date:  3/26/2013  6:53 PM
Author:  MakingTrax Number:  118171 of 132661

I suggest you check further into the 401k contribution situation. When I was in a similar position upon leaving a company, I was able to request from HR that a lump sum contribution (up to the annual max) be taken from my final paycheck, which helped with the tax bite. Typically, adjustments to the 401k contributions can be made throughout the year (although sometimes restricted to only one or two changes).

You may also suggest that your friend coordinate with HR/payroll as to how they will calculate withholdings for the final paycheck. Sometimes they withhold a much greater amount (because of the inflated income level), and then you end up with a large refund; it just depends on whether they make an adjustmetn or not. Or, in your friends case, it may need to be adjusted (due to higher than normal income) to ensure that enough tax is withheld to avoid the need for an estimated tax payment later in the year. In either case, coordinating with payroll now to work out the final paperwork before everything is processed is recommended.

Making Trax
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