Lump Sum Payouts and the IRS: What You Need to Know

Retire For Less With The Annuity Expert by Shawn Plummer

Episode notes

Receiving a large lump sum payment—whether from retirement, a legal settlement, or severance—can feel like a windfall. But before you spend a dime, you need to know how much the IRS will take. In this episode, we’ll walk you through:

  • How the IRS treats lump sum payments
  • The difference between ordinary income and capital gains
  • Why your tax bracket matters more than you think
  • How to use tax withholding and estimated taxes to your advantage
  • Strategies to reduce your overall tax burden on big payouts

If you're expecting a lump sum or recently received one, don’t risk a surprise tax bill. Tune in to learn how to plan smart, stay compliant, and keep more of what you’ve earned.

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