Tax Guru's----Please Help!!!!?

If this is a "lump sum" payout, the company has 2 options. They could add it to your last paycheck (called aggregate) and tax based on your W-4. This will probably put you in the 35% tax bracket for federal plus what ever the highest tax bracket in MI, since they payroll program has to "assume" this is the amount you make each pay period. The other option is to treat it as "supplemental or bonus" pay. The tax rate for federal would be 25% and whatever the MI "bonus" rate is. (Most times this is the most beneficial way for the employee)

For more information on federal taxing go to: http://www.irs.gov/publications/p15/ar02.html#d0e1...

I'm guessing FoMoCo? Anyways, because it's the beginning of the year, add how much you've already made to the $100k, and then see how close you come to that number - and if you do a high level 2007 tax form, you can see how it shakes out - hard to know, if you make $150k no problem, if you currently make $30k, then the tax bite will be bigger.

Of course, anything you funnel into a 401(k) isn't income, but if you have a problem getting a new job, you might want to have that cushion available - I don't know how much other assets you can tap into, so hard to give more detailed advice.

Michigan 4.6% is cut and dry - there are very few reductions in income available, unless you want to put some of that money into the 529 program (www.misaves.com) - that becomes state tax deferred.

If you provide more detail, I can give you more information, but what you provided is somewhat sketchy.

Mom of 2 is talking about the withholding, not the tax itself. The withholding is important, because it affects what what you actually see on the check, but the tax itself is even more important.

depends on what tax bracket you are in (ie other income this year) but basically you'll be paying 28-35% marginal tax on most of this payout, plus whatever michigan rates are, as well as social security/medicare