I want to retire and start or purchase a business with my Pension lump sum payout from my present employer. What are the possible tax consequences of this that I should watch for?
If you take a lump sum you will pay tax on it all at once probably in a higher bracket than if you took it over life or a period certain like 10 years. You may want to look at some sort of financing for your business that will let you draw the pension out more slowly.
Can any tax professionals jump in to help Geoffrey?
@Geoffrey - I would assume that if your pension was set up as pre-tax, your payout will be taxed. If you are looking for information about what kind of business taxes you will need to pay once you are up and running, take a look at the Business Tax Guide.
jbeidle | Contributor | 1/14/2011 - 3:04 pm
NicoleD | Former Moderator | 1/14/2011 - 6:46 am
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