Here are some things for Joann 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
Joann 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 Joann employee, doing so may enable you to postpone payment of tax on the income until next year.
2. Accelerate deductions
Joann 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 Joann 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 Joann 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 Joann employees to request a Form W-4 change and for their employers from Joann 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 Joann 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 Joann-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, Joann 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 Joann-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 Joann employee age 72 or older, you generally must take required minimum distributions (RMDs) from traditional IRAs and Joann-sponsored retirement plans (special rules apply if you're still working and participating in Joann'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
Joann 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 Joann 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 plan does Joann offer to its employees?
Joann offers a 401(k) retirement savings plan to help employees save for their future.
How can Joann employees enroll in the 401(k) plan?
Joann employees can enroll in the 401(k) plan through the company’s HR portal or by contacting their HR representative for assistance.
Does Joann provide a matching contribution to the 401(k) plan?
Yes, Joann offers a matching contribution to the 401(k) plan, helping employees maximize their retirement savings.
What is the vesting schedule for Joann's 401(k) matching contributions?
The vesting schedule for Joann's 401(k) matching contributions typically follows a standard schedule, which employees can review in their plan documents.
Can Joann employees change their contribution percentage to the 401(k) plan?
Yes, Joann employees can change their contribution percentage at any time, subject to the plan's guidelines.
What investment options are available in Joann's 401(k) plan?
Joann's 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.
Is there a minimum contribution required for Joann employees to participate in the 401(k) plan?
Yes, Joann may have a minimum contribution requirement for employees to participate in the 401(k) plan, which is detailed in the plan documents.
Can Joann employees take loans against their 401(k) balance?
Yes, Joann allows employees to take loans against their 401(k) balance, subject to specific terms and conditions outlined in the plan.
What happens to Joann employees' 401(k) accounts if they leave the company?
If Joann employees leave the company, they have several options for their 401(k) accounts, including rolling over to another retirement account or cashing out, subject to tax implications.
How often can Joann employees access their 401(k) account statements?
Joann employees can access their 401(k) account statements quarterly through the plan's online portal.
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