Ask a tax advisor on the topic of Severance pay

tax back-payment

December 2, 2009 | 20,00 EUR | answered by Dipl.BW/SB Ulrich Stiller

In January 2010, I will receive a severance payment of 170,000 euros, which should be taxed at approximately 30%. For the rest of the year, I will be employed in a transfer company. My tax class is IV. My spouse will be employed in 2010. Is it possible that we will have to pay back taxes for 2010 in 2011, and if so, how much can we expect to pay?

Dipl.BW/SB Ulrich Stiller

Dear advice seeker,

Thank you for your inquiry, which I would like to answer based on the information you provided and considering your situation within the scope of an initial consultation as follows:

Without knowing the exact income, including that of your wife, it is not possible to make a statement. It may be advisable for you to switch to tax class III and have your wife switch to tax class V. The tax class combination III/V is designed so that the sum of the tax deductions for both spouses roughly corresponds to their joint annual tax liability, with the spouse in tax class III earning 60% and the spouse in tax class V earning 40% of the combined work income. You should have this checked by a tax advisor.

Due to the tax progression, it is possible that there may be a tax repayment for 2010 in 2011. The amount of this repayment can only be calculated after all income data has been provided and cannot be determined based on just one figure, such as your severance payment.

Best regards,

Ulrich Stiller
Tax Advisor