Another thing to consider is that your company might be withholding for things beyond just taxes. When I received severance, they took out: - Health insurance premiums for extended coverage - Repayment of a company laptop I kept - Outstanding 401k loan balance Check your severance statement and see if there are any deductions beyond the standard tax withholdings. Sometimes companies will use the severance payment to settle any outstanding balances or advance payments you've received. Also, make sure they didn't continue deductions for benefits you're no longer eligible for. I had to fight to get back money they withheld for parking garage access I obviously wasn't going to be using anymore!

Has anyone dealt with getting a severance paid out over multiple payments instead of one lump sum? My company is offering me either option, and I'm wondering if taking it over 3 months would result in less tax withholding upfront compared to a lump sum.

Just finished dealing with one of these for my 2022 return! They questioned some charitable contributions. I sent donation receipts, bank statements showing the transfers, and a spreadsheet summarizing everything. Got confirmation last week that my return was accepted as filed. The whole process took about 10 weeks from first letter to resolution. Just be methodical and you'll be fine!

I just went through something similar! Got a "tax review" letter in January for my 2023 return - they were questioning my business expense deductions. Turned out to be a CP75 correspondence examination, which is basically their way of saying "prove this one thing and we'll leave you alone." The vague language is definitely frustrating, but here's what worked for me: I called the number on the letter (took 3 attempts over different days to get through), and the agent was actually helpful in explaining exactly what they needed. They were specifically reviewing my office supply and travel expenses because the amounts were higher than typical for my industry. Sent them organized receipts, bank statements, and a simple spreadsheet showing the business purpose for each expense. Got a "no change" letter about 7 weeks later. The whole thing was much less scary than it seemed initially - just their way of spot-checking specific items that their computers flagged. Your straightforward situation will probably resolve even faster than mine did!

Has anyone had success with adjusting withholding between different vesting dates? My company uses Schwab and I have to contact them directly each time I want to change the withholding percentage. It's a huge pain.

For RSU withholding, I've found success using a hybrid approach that balances simplicity with accuracy. Here's what I do: 1. Calculate your projected effective tax rate for the full year (including all RSUs and salary) 2. Use that rate + 2-3% for the first half of the year's vests 3. Increase to your marginal rate for Q3/Q4 vests when you're actually hitting those higher brackets The key insight is that your effective rate is what matters for total tax owed, but timing matters for cash flow. Early vests can be withheld at lower rates since you haven't "used up" your lower tax brackets yet. I also set up quarterly check-ins to compare my year-to-date withholding against my projected annual tax liability. If I'm significantly under or over, I adjust the withholding rate for remaining vests accordingly. One thing to watch out for: if your company stock appreciates significantly during the year, your actual RSU income could be much higher than projected. I learned this the hard way in 2023 when our stock went up 40% and I ended up under-withheld despite careful planning.

I tried doing exactly what you're planning a couple years ago and ended up getting hit with an underpayment penalty that wiped out a chunk of my credit card rewards. Make sure you meet one of the safe harbor rules: 1. Owe less than $1,000 in tax after subtracting withholding (obviously not your case) 2. Pay 90% of the tax for the current year through withholding 3. Pay 100% of the tax shown on your previous year's return (110% if your AGI was over $150k) For your income level, you'd need to hit that 110% of previous year mark to be safe.

Your math looks reasonable, but I'd recommend being more conservative with your calculations. Based on your 2025 projected income of $289k, you're likely looking at a total tax liability around $50-52k. To owe $8k, you'd want to withhold around $42-44k. However, given your income level, you MUST pay at least 110% of your 2024 tax liability ($46.2k × 1.10 = $50.8k) through withholding and estimated payments to avoid underpayment penalties. This means you can only owe about $1-2k safely, not $8k. If you want to maximize credit card rewards while staying penalty-free, consider this strategy: meet the 110% safe harbor through withholding, then make estimated payments with credit cards throughout the year. You could make four quarterly estimated payments of $2-3k each on different cards to hit signup bonuses without owing a large amount at filing time. Also double-check that your rewards exceed the ~2% processing fees. Unless you're hitting signup bonuses or have cards with exceptional tax payment rewards, the math might not work in your favor.

It's so refreshing to see a positive tax story! I was under a lock-in letter for YEARS because I was afraid to call the IRS. Finally called last month and got it resolved in one call. My employer implemented the change on my very next paycheck - finally getting my full pay instead of the maximum withholding! The stress relief is incredible.

Congratulations on getting this resolved! Your story gives me hope - I've been putting off dealing with my own lock-in letter for months because I was dreading the IRS phone call. The 75-minute wait time doesn't sound fun, but knowing it's actually fixable and that the agents can be reasonable makes me feel much more confident about tackling this. I'm curious - did you need to provide any specific documentation during the call, or was it mostly just verbal verification of your compliance history? I want to make sure I have everything ready before I make the call so I don't waste that wait time only to find out I'm missing something important. Thanks for sharing your success story and for giving back to the community that helped you!