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

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

2. Accelerate deductions
Biogen 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 Biogen 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 Biogen 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 Biogen employees to request a Form W-4 change and for their employers from Biogen 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 Biogen 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 Biogen-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, Biogen 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 Biogen-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 Biogen employee age 72 or older, you generally must take required minimum distributions (RMDs) from traditional IRAs and Biogen-sponsored retirement plans (special rules apply if you're still working and participating in Biogen'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
Biogen 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 Biogen 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 Biogen offer to its employees?

Biogen offers a 401(k) retirement savings plan to its employees.

How can employees at Biogen enroll in the 401(k) plan?

Employees at Biogen can enroll in the 401(k) plan through the company’s HR portal or by contacting the HR department for assistance.

Does Biogen match employee contributions to the 401(k) plan?

Yes, Biogen provides a matching contribution to employee contributions made to the 401(k) plan, subject to certain limits.

What is the maximum contribution limit for Biogen's 401(k) plan?

The maximum contribution limit for Biogen's 401(k) plan is determined by IRS guidelines, which may change annually.

Can employees at Biogen take loans against their 401(k) savings?

Yes, Biogen allows employees to take loans against their 401(k) savings, subject to specific terms and conditions.

What investment options are available in Biogen's 401(k) plan?

Biogen’s 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.

How often can Biogen employees change their 401(k) contribution amounts?

Biogen employees can change their 401(k) contribution amounts at any time, subject to payroll processing timelines.

Is there a vesting schedule for Biogen's 401(k) matching contributions?

Yes, Biogen has a vesting schedule for its matching contributions, which means employees must work for a certain period to fully own those contributions.

Can Biogen employees roll over their 401(k) savings from a previous employer?

Yes, Biogen employees can roll over their 401(k) savings from a previous employer into Biogen's 401(k) plan.

What happens to Biogen employees' 401(k) savings if they leave the company?

If Biogen employees leave the company, they can either roll over their 401(k) savings to another qualified plan, cash out, or leave the savings in the Biogen plan if permitted.

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

Biogen is undergoing a significant restructuring that includes layoffs impacting various departments. The company is also making changes to its pension plan and 401(k) benefits.