I have a situation that I'm hoping to get some information/suggestions on.
I'm currently in the Entertainment Industry and have been on tour for the past two years. In that time, I have not used any of my vacation time. In six months, I plan to leave my job and will have accrued approximately 10k in Vacation pay. My employer allows me to cash this out and I was wondering what the best way to do this would be? I was thinking of cashing out $250 of my vacation/week instead of doing it in one whole lump sum in July. My thinking was that I would be taxed less.. but I wanted to get some suggestions on if this is worth doing or what other tax consequences I might face.
Also, as we're on the road, each month we're in a different state and therefore the taxes on our salaries differ wherever we are. Not sure how that would impact the best way to withdraw my vacation pay.
If anyone has any suggestions or thoughts, Id be glad to hear them. Thanks.
Thu Jan 13, 2011 1:34 am
coaster Senior Advisor
Cash: $ 1626.30
Joined: 11 Oct 2005
The only tax consequence is WHEN you get PAID the money, not when it was earned. It will be taxable income in the year in which you receive it.