Is deferred comp money that is taken in a lump sum, taxed the same as any other income?
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Is deferred comp money that is taken in a lump sum, taxed the same as any other income?
Yes, and no. Federal and state income taxes, FICA and Medicaire taxes are all withheld as usual. However, depending on the size of the payment federal income tax may be withheld at a flat rate of 25%.
It was already taxed at 20%. I'm just wondering if I'll get something back next year. My only other income will be less than $3000 plus my SS.
It is taxed as ordinary income. Whether you'll get a refund, and the effect (if any) on your SS income is impossible to answer without a lot more detail.
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