<prompt> Human: Hi, I work in California and my employer is offering vacation cash out option for 2018. I am close to hitting the vacation cap so I want to cash out almost all the vacation I will be accruing over the next year. I have 2 options to do so. Cash out as a separate check where the normal fed and CA tax applies along with SDI and other mandatory deductions Cash out as part of my regular paycheckNow my question is in 2 parts. Which of the options be the most efficient waylesser tax, more money in the bank, etc. to do this? I participate in 401K program with my employer, if I choose to go with the option 2 where I request the cash out be part of my regular paycheck, will the 401K deductions apply on the cash out pay as well?Thank you in advance. This is all new to me, just reaching out for helpEdit : I am terrible at formattingEdit 2: Thank you all for the responses. It seems beneficial upfront if I get a separate check instead of claiming in tax returns later on  <response>: It doesnt matter whether you do it as a separate check or as part of a regular paycheck. Its still income that counts just the same.Its like if your company changed from bi-weekly pay to weekly pay. You dont end up paying more or less taxes because of the change. 