Essential Year-End Tax Strategies for American Eagle Outfitters Employees: What You Need to Know Before 2023

Here are some things for American Eagle Outfitters employees and retirees to consider as they weigh potential tax moves between now and the end of the year.

1. Defer income to next year
American Eagle Outfitters employees must consider opportunities to defer income to 2023, particularly if you think you may be in a lower tax bracket then. For example, you may be able to defer a year-end bonus or delay the collection of business debts, rent, and payments for services. As a American Eagle Outfitters employee, doing so may enable you to postpone payment of tax on the income until next year.

2. Accelerate deductions
American Eagle Outfitters employees and retirees should also look for opportunities to accelerate deductions into the current tax year. If you itemize deductions, making payments for deductible expenses such as medical expenses, qualifying interest, and state taxes before the end of the year (instead of paying them in early 2023) could make a difference on your 2022 return.

3. Make deductible charitable contributions
As a American Eagle Outfitters employee, if you itemize deductions on your federal income tax return, you can generally deduct charitable contributions, but the deduction is limited 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 give and the type of organization to which you contribute. (Excess amounts can be carried over for up to five years.)

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4. Bump up withholding to cover a tax shortfall
As a American Eagle Outfitters employee, if it looks as though you will owe federal income tax for the year, consider increasing your withholding on Form W-4 for the remainder of the year to cover the shortfall. Time may be limited for American Eagle Outfitters employees to request a Form W-4 change and for their employers from American Eagle Outfitters to implement it in time for 2022. The biggest advantage in doing so is that withholding is considered as having been paid evenly throughout the year instead of when the dollars are actually taken from your paycheck. This strategy can be implemented by American Eagle Outfitters employees to make up for low or missing quarterly estimated tax payments.

5. Save more for retirement
Deductible contributions to a traditional IRA and pre-tax contributions to a American Eagle Outfitters-sponsored retirement plan such as a 401(k) can reduce your 2022 taxable income. As a fortune 500 employee, if you haven't already contributed up to the maximum amount allowed, consider doing so. For 2022, American Eagle Outfitters employees can contribute up to $20,500 to a 401(k) plan ($27,000 if you're age 50 or older) and up to $6,000 to traditional and Roth IRAs combined ($7,000 if you're age 50 or older).* The window to make 2022 contributions to a American Eagle Outfitters-sponsored plan generally closes at the end of the year, while you have until April 18, 2023, to make 2022 IRA contributions.

*Roth contributions are not deductible, but Roth-qualified distributions are not taxable.

6. Take the required minimum distributions
If you are a American Eagle Outfitters employee age 72 or older, you generally must take required minimum distributions (RMDs) from traditional IRAs and American Eagle Outfitters-sponsored retirement plans (special rules apply if you're still working and participating in American Eagle Outfitters's retirement plan). You have to make the withdrawals by the date required — the end of the year for most individuals. The penalty for failing to do so is substantial: 50% of the amount that wasn't distributed on time. As a fortune 500 employee, making these distributions in a timely manner is essential as to avoid the late penalty.

7. Weigh year-end investment moves
American Eagle Outfitters employees and retirees shouldn't let tax considerations drive investment decisions. However, it's worth considering the tax implications of any year-end investment moves that you make. For example, if you have realized net capital gains from selling securities at a profit, you might avoid being taxed on some or all of those gains by selling losing positions. As a American Eagle Outfitters employee, any losses over and above the number of your gains can be used to offset up to $3,000 of ordinary income ($1,500 if your filing status is married filing separately) or carried forward to reduce your taxes in future years.

Tags: Financial Planning , Tax , Retirement , 2022

What type of retirement savings plan does American Eagle Outfitters offer to its employees?

American Eagle Outfitters offers a 401(k) retirement savings plan to help employees save for their future.

Is participation in the 401(k) plan at American Eagle Outfitters mandatory?

Participation in the 401(k) plan at American Eagle Outfitters is voluntary; employees can choose to enroll or opt out.

What are the eligibility requirements for the 401(k) plan at American Eagle Outfitters?

Employees of American Eagle Outfitters are typically eligible to participate in the 401(k) plan after completing a certain period of service, which is outlined in the employee handbook.

Does American Eagle Outfitters match employee contributions to the 401(k) plan?

Yes, American Eagle Outfitters offers a matching contribution to the 401(k) plan, subject to specific terms and conditions.

How can employees of American Eagle Outfitters enroll in the 401(k) plan?

Employees can enroll in the 401(k) plan at American Eagle Outfitters by completing the necessary enrollment forms through the company’s HR portal.

What investment options are available in the American Eagle Outfitters 401(k) plan?

The American Eagle Outfitters 401(k) plan offers a variety of investment options, including mutual funds and other investment vehicles.

Can employees of American Eagle Outfitters change their contribution percentage to the 401(k) plan?

Yes, employees can change their contribution percentage to the 401(k) plan at any time, subject to the plan's guidelines.

What is the vesting schedule for the 401(k) match at American Eagle Outfitters?

The vesting schedule for the 401(k) match at American Eagle Outfitters typically follows a graded vesting schedule, which is detailed in the employee benefits documentation.

Are there any fees associated with the 401(k) plan at American Eagle Outfitters?

Yes, there may be administrative fees associated with the 401(k) plan at American Eagle Outfitters, which are disclosed in the plan documents.

Can employees take loans against their 401(k) balance at American Eagle Outfitters?

Yes, American Eagle Outfitters allows employees to take loans against their 401(k) balance, subject to specific terms and conditions.

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For more information you can reach the plan administrator for American Eagle Outfitters at 77 Hot Metal Street Pittsburgh, PA 15203; or by calling them at (412) 432-3300.