New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Essential Year-End Tax Strategies for Bank of America Employees: What You Need to Know Before 2023

Healthcare Provider Update: Healthcare Provider for Bank of America Bank of America offers its employees a range of healthcare plans, primarily provided through Anthem BlueCross BlueShield, commonly known as Anthem. This partnership enables Bank of America employees to access various medical, dental, and vision insurance plans, tailored to the needs of its diverse workforce. Anticipated Healthcare Cost Increases for Bank of America in 2026 As we approach 2026, healthcare costs for Bank of America employees are expected to rise significantly due to multiple factors. Notably, the expiration of enhanced federal premium subsidies under the Affordable Care Act (ACA) is projected to amplify out-of-pocket premiums by more than 75% for many employees. Further compounding this issue is the continuous rise in medical costs, which, coupled with escalating charges from insurers, could lead to double-digit rate increases. This perfect storm of factors places a significant financial burden on employees, prompting the need for strategic planning and proactive measures to mitigate rising healthcare expenses Click here to learn more

Here are some things for Bank of America 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
Bank of America 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 Bank of America employee, doing so may enable you to postpone payment of tax on the income until next year.

2. Accelerate deductions
Bank of America 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 Bank of America 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 Bank of America 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 Bank of America employees to request a Form W-4 change and for their employers from Bank of America 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 Bank of America 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 Bank of America-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, Bank of America 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 Bank of America-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 Bank of America employee age 72 or older, you generally must take required minimum distributions (RMDs) from traditional IRAs and Bank of America-sponsored retirement plans (special rules apply if you're still working and participating in Bank of America'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
Bank of America 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 Bank of America 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 are the key differences between the single-life annuity option and the joint-life annuity option offered by Bank of America Corporation, and how can employees determine which option is more beneficial for their personal circumstances? To make this decision, employees should consider their marital status, life expectancy, and other retirement income sources they might have while assessing their overall financial picture.

Single-life vs. Joint-life Annuity Options: The single-life annuity option provides monthly payments only for the retiree's life, making it potentially higher as it is based solely on one life expectancy. Conversely, the joint-life annuity option extends payments to cover the life of a spouse or another beneficiary after the retiree's death, typically resulting in lower monthly payments due to the extended payout period. Employees should consider their marital status, life expectancy, and whether they need to provide for a spouse or other dependents in deciding which option suits their personal circumstances best.

How does the vesting schedule in the pension plan of Bank of America Corporation affect employees' entitlement to their benefits, and what factors should employees consider when planning for their retirement? Understanding whether your plan follows a cliff or graded vesting approach is crucial to knowing how long employees must work before they fully own their benefits.

Vesting Schedule Impact: Bank of America's pension plan offers two types of vesting schedules: cliff and graded. Cliff vesting allows employees to be fully vested after a set number of years, while graded vesting gradually increases the vested percentage over time. Employees should factor in their career plans, like how long they intend to stay with the company, as reaching full vesting can significantly affect their pension entitlement.

Given that pension plans are increasingly uncommon, as noted for Bank of America Corporation, how can employees best utilize their pension benefits to ensure financial stability in retirement? Employees should explore the historical context of pension availability in the company and industry while considering the impact of other retirement accounts, such as 401(k) plans and IRAs.

Utilizing Pension Benefits: With pension plans becoming less common, employees of Bank of America should maximize this benefit by understanding how it complements other retirement resources such as 401(k)s or IRAs. Employees can benefit from the security a pension provides by integrating it into a broader retirement strategy, considering factors like inflation and other income sources.

In what ways can Bank of America Corporation employees access information about the specifics of their pension plans, including eligibility criteria and benefit calculations? Employees should familiarize themselves with their Summary Plan Description (SPD) and the Annual Funding Notice they receive to stay informed about their benefits.

Accessing Pension Plan Information: Bank of America employees can access details of their pension plans through the Summary Plan Description (SPD) and Annual Funding Notices. These documents provide essential information about eligibility, benefit calculations, and rights under the plan, helping employees make informed decisions about their retirement.

What considerations should Bank of America Corporation employees take into account when opting for a lump-sum distribution versus an annuity payment, and how might these choices impact their long-term financial security? Employees need to evaluate their comfort with investment risks and their plans for retirement fund distribution, keeping in mind the potential for inflation.

Choosing Between Lump-Sum and Annuity Payments: The choice between receiving a lump-sum or annuity payments impacts long-term financial security. A lump-sum offers flexibility and control over investments, suitable for those comfortable with managing large sums. An annuity provides a steady income stream, preferable for those seeking stability and less investment risk. Factors like health, life expectancy, and other income sources should influence this decision.

How can employees at Bank of America Corporation estimate their monthly retirement income from the pension plan, and what resources are available to help them with this calculation? Utilizing employer-provided tools, financial calculators, or consulting with a financial planner could significantly aid employees in understanding their expected retirement income.

Estimating Monthly Retirement Income: Bank of America employees can estimate their pension income using tools provided by the employer, such as financial calculators, or by consulting with a financial planner. These resources help employees project their income based on their salary and years of service.

Considering the potential tax implications associated with pension plans, how should employees of Bank of America Corporation prepare to manage these taxes upon retiring? Understanding when taxes will be incurred and what strategies can minimize tax liabilities will be key as they transition into retirement.

Managing Tax Implications of Pensions: Understanding the tax implications of pension benefits is crucial. Bank of America employees should plan for the taxation of pension payments upon receipt and consider strategies to minimize tax liabilities, possibly consulting with tax professionals.

How does the funding structure of Bank of America Corporationâ€™s pension plan, including employer contributions, influence the sustainability and reliability of benefits for employees? Employees should be aware of the responsibilities their employer has in managing the pension plan and ensuring sufficient funding across economic fluctuations.

Funding Structure and Benefit Reliability: The sustainability of pension benefits at Bank of America depends on the company's commitment to adequately fund the plan and pay required insurance premiums to the PBGC. Employees should be aware of the funding status through the Annual Funding Notice to assess the plan's health.

What role does the Pension Benefits Guaranty Corporation (PBGC) play in protecting the pension benefits of Bank of America Corporation employees, and how should employees understand this protection when planning for their future? Familiarizing themselves with the limits of the PBGC can help employees gauge the security of their pension benefits.

Role of the PBGC: The Pension Benefits Guaranty Corporation (PBGC) protects the pension benefits of Bank of America employees, providing a safety net in cases where plans cannot meet their obligations. Employees should understand the extent of PBGC coverage and limits to evaluate the security of their benefits.

How can Bank of America Corporation employees reach out to learn more about their pension plan and any specific benefits applicable to them? Employees should seek guidance from the plan administrator or utilize the communication channels provided within the company to obtain personalized assistance regarding their retirement planning needs.

Learning More About Pension Benefits: Bank of America employees looking for more detailed information about their specific pension benefits should consult their plan administrator or utilize company-provided communication channels. This direct engagement helps ensure employees receive personalized and up-to-date information regarding their retirement planning.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Bank of America offers both a traditional defined benefit pension plan and a defined contribution 401(k) plan. The defined benefit plan provides retirement income based on years of service and final average pay. The 401(k) plan features company matching contributions and various investment options, including target-date funds and mutual funds. Bank of America provides financial education and planning resources to help employees manage their retirement savings.

Bank of America has faced layoffs as part of its ongoing restructuring efforts in 2024. Despite the layoffs, the company continues to offer extensive retirement benefits, including 401(k) plans, pension plans, and various health and wellness programs for retirees. Staying updated on these benefits is essential in the current political environment.

Bank of America grants RSUs that vest over a specific period, providing shares upon vesting. They also offer stock options, allowing employees to purchase shares at a set price.

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For more information you can reach the plan administrator for Bank of America at 100 N Tryon St Charlotte, NC 28255; or by calling them at +1 800-432-1000.