It depends on your tax bracket. For instance, if your employer offers you a payout of $100,000, you will owe federal tax of $35,000. You may also owe estate tax.

It may be best to check with your tax professional; he or she may be familiar with your tax rate and know whether any other taxes will apply.

For related reading, see Negotiating Severance Agreements.

This question was answered by Denise Appleby
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