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Healthcare Provider Update: Healthcare Provider: Kaiser Permanente Kaiser Permanente is a leading integrated healthcare provider that offers a range of medical services including preventive care, hospitalization, and specialty care across various states. Potential Healthcare Cost Increases in 2026 As we approach 2026, significant healthcare cost increases are expected, especially for Kaiser Permanente customers. Health insurance premiums for Affordable Care Act (ACA) plans are projected to rise dramatically, with some individuals facing increases of over 75% due to the anticipated expiration of enhanced federal premium subsidies. Coupled with higher medical costs and aggressive rate hikes from major insurers, many policyholders could experience unprecedented out-of-pocket expenses, signaling a challenging financial landscape for consumers in the near future. Click here to learn more
It is important for KP employees to pay specific attention to interest rates as some of the KP pension plans are sensitive to rate changes. Some KP employees are allowed to take their pension utilising new rates each month. If interest rates continue to rise, KP employees will find this article useful as it will help with the retirement planning process.
'For Kaiser Permanente employees, proactive tax planning strategies, like deferring income and accelerating deductions, can significantly enhance retirement readiness, and working with an advisor like Kevin Landis from The Retirement Group, a division of Wealth Enhancement Group, can help you make the most of these opportunities.'
'As the tax landscape evolves, it's crucial for Kaiser Permanente employees to carefully weigh year-end moves such as contributing to retirement accounts or adjusting withholding, and an advisor like Brent Wolf from The Retirement Group, a division of Wealth Enhancement Group, can guide you in optimizing your tax strategy for long-term financial success.'
In this article we will discuss:
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1. Tax strategies for employees and retirees of Kaiser Permanente companies, including deferring income and accelerating deductions.
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2. Charitable contributions and their impact on tax returns for individuals who itemize deductions.
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3. The importance of required minimum distributions (RMDs) and year-end investment decisions.
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According to a recent study by the Insured Retirement Institute (IRI), a leading financial research firm, 60% of Baby Boomers plan to continue working in some capacity during retirement. This means that for many employees and retirees of Kaiser Permanente companies, tax planning strategies will continue to be relevant well beyond retirement age. It is important for this demographic to consider the impact of their retirement income on their tax liabilities, as well as the tax implications of continuing to work in retirement. With that taken into account, Here are some factors for employees and retirees of Kaiser Permanente companies to consider as they evaluate potential tax moves between now and the end of the year.
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1. Defer income to next year
Consider opportunities to defer income until 2023, especially if you believe you will be in a reduced tax bracket in 2023. For instance, you may be able to defer an end-of-year bonus or delay the collection of business debts, rent, and service payments. As an employee of Kaiser Permanente, doing so may allow you to defer income tax payment until the following year.
2. Accelerate deductions
Employees and retirees of Kaiser Permanente should also seek opportunities to accelerate deductions into the current tax year. If you itemize deductions, paying medical expenses, qualifying interest, and state taxes before the end of the year (instead of paying them in early 2023) could affect your 2022 tax return.
3. Make deductible charitable contributions
Generally, if you are an employee of Kaiser Permanente and itemize deductions on your federal income tax return, you can deduct charitable contributions up to 50% (currently increased to 60% for cash contributions to public charities), 30%, or 20% of your adjusted gross income (AGI), depending on the type of property you donate and the type of organization to which you donate. (Exceeding quantities may be carried forward for a maximum of five years.)
4. Bump up withholding to cover a tax shortfall
If it appears that you will incur federal income tax for the year as an employee of Kaiser Permanente, consider increasing your withholding on Form W-4 for the remainder of the year to cover the shortfall. Time may be limited for Kaiser Permanente employees to request a Form W-4 modification and for their employers to implement the change by 2022. The greatest benefit is that withholding is considered to have been paid equitably throughout the year, as opposed to when the dollars are actually deducted from your paycheck. This strategy can be utilized by employees of Kaiser Permanente to make up for missed or insufficient quarterly estimated tax payments.
5. Save more for retirement
You can reduce your 2022 taxable income through contributions to a traditional IRA and a 401(k) sponsored by a Kaiser Permanente company. If you are an employee of Kaiser Permanente and have not already contributed the maximum amount, you should consider doing so. For 2022, Kaiser Permanente employees can contribute up to $20,500 to a 401(k) plan ($27,000 if over 50) and up to $6,000 to traditional and Roth IRAs combined ($7,000 if over 50).* The window for 2022 contributions to a Kaiser Permanente-sponsored plan typically concludes at the end of the year, whereas the deadline for 2022 IRA contributions is April 18, 2023.
Contributions to a Roth account are not tax-deductible, but qualified Roth distributions are not taxable.
6. Take the required minimum distributions
If you are 72 or older and work for Kaiser Permanente, you are generally required to take required minimum distributions (RMDs) from traditional IRAs and Kaiser Permanente-sponsored retirement plans (exceptions apply if you are still employed and participating in Kaiser Permanente's retirement plan). The deadline for withdrawals is typically the end of the year for most individuals. The penalty for noncompliance is severe: fifty percent of the quantity that was not distributed on time. As an employee of Kaiser Permanente, it is imperative that you make these distributions on time to avoid the late payment penalty.
7. Weigh year-end investment moves
Kaiser Permanente employees and retirees shouldn't let tax considerations dictate investment decisions. Nonetheless, you should consider the tax implications of any year-end investment decisions. If you have realized net capital gains from the sale of securities at a profit, you may be able to avoid taxation on some or all of these gains by selling negative positions. Any losses in excess of your gains as an employee of Kaiser Permanente can be used to mitigate up to $3,000 of ordinary income ($1,500 if your filing status is married filing separately) or carried forward to reduce your tax liability in future years.
Conclusion
Preparing your taxes is like taking care of your health. Just as you need to stay on top of your physical well-being to prevent future health issues, you also need to plan ahead and take the necessary steps to ensure that you're not hit with unexpected tax liabilities in the future. By deferring income, accelerating deductions, making charitable contributions, and contributing to your retirement accounts, you can ensure that your financial health is in good shape for the years ahead. Just as you wouldn't skip your annual check-up, you shouldn't overlook the importance of taking care of your taxes.
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1. Weltman, Barbara. '5 Tax Planning Strategies for Your Retirement Income.' Investopedia , 3 Oct. 2022, https://www.investopedia.com/retirement/tax-strategies-your-retirement-income/?utm_source=chatgpt.com .
2. Morgan Stanley. 'Tax-Smart Strategies for Your Retirement.' Morgan Stanley , 2023, https://www.morganstanley.com/articles/tax-strategies-for-retirement?utm_source=chatgpt.com .
3. Vanguard. 'Tax-Efficient Retirement Strategy.' Vanguard , 2023, https://investor.vanguard.com/advice/tax-efficient-retirement-strategy?utm_source=chatgpt.com .
4. Thrivent. '6 Retirement Tax Planning Strategies You Should Know.' Thrivent , 2023, https://www.thrivent.com/insights/taxes/6-retirement-tax-planning-strategies-you-should-know?utm_source=chatgpt.com .
5. New York Life Insurance. 'Tax Planning Strategies for Retirement.' New York Life Insurance , 2023, https://www.newyorklife.com/articles/tax-considerations-in-retirement?utm_source=chatgpt.com .
What is the 401(k) plan offered by Kaiser Permanente?
The 401(k) plan offered by Kaiser Permanente is a retirement savings plan that allows employees to save a portion of their salary on a pre-tax basis, helping them build a nest egg for retirement.
How does Kaiser Permanente match contributions to the 401(k) plan?
Kaiser Permanente provides a matching contribution to the 401(k) plan, where they match a percentage of employee contributions, up to a certain limit, helping employees maximize their savings.
What are the eligibility requirements for Kaiser Permanente's 401(k) plan?
Employees of Kaiser Permanente are generally eligible to participate in the 401(k) plan after completing a specified period of service, which is outlined in the plan documents.
Can employees of Kaiser Permanente make changes to their 401(k) contributions?
Yes, employees of Kaiser Permanente can change their contribution amounts to the 401(k) plan at any time, subject to the plan's guidelines.
What investment options are available in Kaiser Permanente's 401(k) plan?
Kaiser Permanente's 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to help employees diversify their portfolios.
Does Kaiser Permanente provide educational resources for employees regarding the 401(k) plan?
Yes, Kaiser Permanente offers educational resources and tools to help employees understand their 401(k) options and make informed investment decisions.
What is the vesting schedule for Kaiser Permanentes 401(k) matching contributions?
The vesting schedule for Kaiser Permanentes 401(k) matching contributions varies based on years of service, and employees can find specific details in the plan documents.
Can Kaiser Permanente employees take loans against their 401(k) savings?
Yes, Kaiser Permanente allows employees to take loans against their 401(k) savings, subject to the terms and conditions outlined in the plan.
What happens to the 401(k) plan when an employee leaves Kaiser Permanente?
When an employee leaves Kaiser Permanente, they have several options regarding their 401(k) plan, including cashing out, rolling it over to another retirement account, or leaving it in the plan if allowed.
Is there an automatic enrollment feature in Kaiser Permanente's 401(k) plan?
Yes, Kaiser Permanente may have an automatic enrollment feature that enrolls eligible employees into the 401(k) plan at a default contribution rate unless they choose to opt-out.
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