Author Topic: Laid Off, New Job, and How to minimize taxation?  (Read 895 times)

lcerrito

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Laid Off, New Job, and How to minimize taxation?
« on: November 11, 2015, 06:27:35 AM »
Hi! I think I might know the answer to this, but I wanted to see if there was something I was missing...

I was told I would be laid off in Feb 2016, but I was able to find a new job within a few weeks of receiving the news (take that old company!). I will still get paid 33% of my current salary as severance for 21 weeks, along with approx $2400 of PTO payout and free healthcare. The only problem is, I can't contribute any of that to my 401k, which I had been maxing out. I'm already maxing out my Roth IRA. My company doesn't offer HSA's. I won't be eligible to contribute to my new company's 401k until Dec 2016.

Is there any other tax advantaged account I can put this money into? Any sneaky but legal way way of avoiding the taxation? I'm cringing thinking of the taxes that are going to be taken out of all this, but I can't see any other method of avoiding it. I plan on putting it into my non tax-advantaged Vanguard index fund and just sucking up the tax liability.

Thanks for your help!

ShoulderThingThatGoesUp

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Re: Laid Off, New Job, and How to minimize taxation?
« Reply #1 on: November 11, 2015, 07:31:05 AM »
Recharacterize Roth contribution as a Traditional, if you're under the income limit for that?