Tax impact of quitting mid-year

A rough federal estimate of what quitting does to your 2025 tax bill, and what to set aside.

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Income this year

Taxed as ordinary income: flat withholding (often 22%) can fall short.

Income tax only here: the separate 10% early-withdrawal penalty is not included.

Going 1099 adds 15.3% self-employment tax on top of income tax.

Your filing details

State income tax is notincluded in this federal estimate. Add your state's tax on top.

Enter your income above to see a rough federal tax estimate and what to set aside. Nothing is sent anywhere. It all stays in your browser.

How this works

We add up your ordinary income for the year (wages already earned, wages you still expect, any severance, a 401(k) cash-out, and your net self-employment profit), then subtract the standard deduction (and half of any self-employment tax) to get taxable income. We run that through the 2025 federal brackets for your filing status, add self-employment tax where it applies, and divide the total by your gross income to show an effective rate. The "set aside" figure is simply that estimated federal total, a target to park before it's due.

The gotchas

  • State income tax is not included. This is federal only. Depending on where you live that could add anywhere from nothing to well over 10%.
  • The 401(k) penalty is separate. A cash-out before 59½ usually adds a 10% early-withdrawal penalty on top of the income tax shown here.
  • Severance withholding is often too low. Flat supplemental withholding (often 22%) can leave a gap if the payout pushes you into a higher bracket, which is exactly what this estimate is for.
  • Self-employment tax is on top of income tax. Going 1099 means paying both halves of Social Security and Medicare (15.3%) on your net profit.

Frequently asked questions

Is my severance taxed differently from my salary?
For income tax, severance is ordinary income just like wages. It's added to your other earnings and taxed at your regular rates. Employers often withhold it at a flat supplemental rate (commonly 22%), which can be too little if the payment pushes you into a higher bracket. This tool treats severance as ordinary income so you can see the real bill.
Does this include the 401(k) early-withdrawal penalty?
No. Cashing out a 401(k) before 59½ usually triggers a 10% early-withdrawal penalty on top of ordinary income tax. This estimator only adds the cash-out to your ordinary income; price the separate penalty with the 401(k) rollover vs cash-out tool before you decide.
Why isn't my state income tax included?
State income tax varies enormously: some states have none, others are well over 10%, and each has its own brackets and rules. Modeling all of them accurately is a separate job, so this is a federal-only estimate. Add your state's tax on top before you set money aside.
Are my numbers sent anywhere?
No. Everything is computed in your browser. Your figures are never transmitted to a server, and we never see them.