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

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

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

Constellation Brands offers a 401(k) retirement savings plan to help employees save for their future.

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

Yes, Constellation Brands provides a matching contribution for eligible employees who participate in the 401(k) plan.

What is the maximum contribution limit for the Constellation Brands 401(k) plan?

The maximum contribution limit for the Constellation Brands 401(k) plan aligns with IRS guidelines, which can change annually.

Are there any vesting schedules for the Constellation Brands 401(k) matching contributions?

Yes, Constellation Brands has a vesting schedule for matching contributions, which determines how much of the employer match you own based on your years of service.

Can employees of Constellation Brands take loans against their 401(k) savings?

Yes, employees may have the option to take loans against their 401(k) savings, subject to the plan's rules and limits.

What investment options are available in the Constellation Brands 401(k) plan?

The Constellation Brands 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.

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

Employees can enroll in the Constellation Brands 401(k) plan through the company's HR portal or by contacting the HR department for assistance.

Is there an automatic enrollment feature in the Constellation Brands 401(k) plan?

Yes, Constellation Brands may offer an automatic enrollment feature for new employees, automatically enrolling them in the 401(k) plan at a specified contribution rate.

What happens to my Constellation Brands 401(k) if I leave the company?

If you leave Constellation Brands, you can choose to roll over your 401(k) balance to another retirement account, cash out, or leave it in the plan if allowed.

Can employees at Constellation Brands change their contribution percentage to the 401(k) plan?

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

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For more information you can reach the plan administrator for Constellation Brands at 207 High Point Drive Victor, NY 14564; or by calling them at (585) 678-7100.