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

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

Healthcare Provider Update: Healthcare Provider for KLA Corporation KLA Corporation, a leading supplier of process control and yield management systems for the semiconductor industry, offers its employees a robust healthcare plan through Aetna. Aetna provides a comprehensive suite of options that includes medical, dental, and vision coverage, ensuring that KLA employees have access to essential healthcare services. --- Potential Healthcare Cost Increases in 2026 In 2026, healthcare costs are expected to rise significantly for many individuals due to a combination of factors, including the expiration of enhanced federal subsidies under the ACA and rising medical costs. Preliminary reports suggest that health insurance premiums for ACA marketplace plans could see increases exceeding 60% in some states, leading to an alarming average out-of-pocket premium hike of over 75% for approximately 22 million enrollees. As insurers struggle with higher claims costs and regulatory pressures, securing affordable coverage may become a challenging task for consumers. Click here to learn more

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

2. Accelerate deductions
KLA 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 KLA 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.)

Featured Video

Articles you may find interesting:

4. Bump up withholding to cover a tax shortfall
As a KLA 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 KLA employees to request a Form W-4 change and for their employers from KLA 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 KLA 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 KLA-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, KLA 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 KLA-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 KLA employee age 72 or older, you generally must take required minimum distributions (RMDs) from traditional IRAs and KLA-sponsored retirement plans (special rules apply if you're still working and participating in KLA'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
KLA 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 KLA 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 is the 401(k) plan offered by KLA?

KLA offers a 401(k) plan that allows employees to save for retirement through pre-tax contributions, which can help reduce their taxable income.

Does KLA provide a matching contribution for its 401(k) plan?

Yes, KLA provides a matching contribution to the 401(k) plan, which helps employees maximize their retirement savings.

How can employees enroll in KLA's 401(k) plan?

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

What types of investment options are available in KLA's 401(k) plan?

KLA's 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to suit different risk tolerances.

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

Yes, KLA has a vesting schedule for its matching contributions, which means employees must work for the company for a certain period before they fully own those contributions.

Can employees take loans against their 401(k) balance at KLA?

Yes, KLA allows employees to take loans against their 401(k) balance, subject to specific terms and conditions outlined in the plan.

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

The maximum contribution limit for KLA's 401(k) plan is determined by IRS guidelines, which may change annually. Employees should check the current limits for the specific year.

How often can employees change their contribution percentage in KLA's 401(k) plan?

Employees at KLA can change their contribution percentage at any time, allowing them to adjust their savings based on their financial situation.

Does KLA offer any educational resources for employees regarding the 401(k) plan?

Yes, KLA provides educational resources, including workshops and online tools, to help employees understand their 401(k) options and make informed investment decisions.

What happens to my 401(k) account if I leave KLA?

If you leave KLA, you have several options for your 401(k) account, including rolling it over into an IRA or a new employer's plan, or cashing it out, though the latter may have tax implications.

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

Name of the Pension Plan: KLA’s pension plan is known as the KLA Corporation Retirement Plan. Eligibility and Qualification: Years of Service: Employees are generally eligible after completing 5 years of service. Age Qualification: Employees must be at least 55 years old to qualify for retirement benefits. Pension Formula: The pension formula is based on a Defined Benefit Plan where benefits are calculated using a formula that typically considers years of service and average salary. The formula includes factors such as Years of Service and Final Average Salary. Name of the 401(k) Plan: KLA’s 401(k) plan is referred to as the KLA Corporation 401(k) Plan. Eligibility and Qualification: Employees are generally eligible to participate in the 401(k) plan immediately upon employment. 401(k) Plan Details: Contributions can be made through pre-tax and Roth options. The company may offer matching contributions up to a certain percentage of the employee’s salary.

KLA Announces Workforce Reduction and Restructuring Plans: In July 2024, KLA announced a significant restructuring plan that includes a reduction of approximately 5% of its global workforce. The company cited the need to streamline operations and enhance efficiency as the primary reasons for these changes. This move is part of a broader strategy to adjust to current economic uncertainties and shifting market demands.

KLA Corporation Stock Options: Acronym: KLA Details: KLA Corporation offered stock options as part of their employee compensation package in 2022. Employees were eligible based on their role and tenure with the company. KLA Corporation RSUs: Acronym: KLA Details: RSUs were granted to key employees and executives. These units vested over a period, typically 3 to 4 years, aligning with the company’s performance goals.

2023-2024 Updates: KLA has been focusing on increasing access to mental health resources and expanding telehealth services. This includes partnering with new telemedicine providers and increasing support for mental health through improved Employee Assistance Programs (EAPs). Benefit Enhancements: There has been an emphasis on preventive care and wellness programs. KLA has updated its benefits to include more comprehensive coverage for mental health services and preventive care, reflecting broader trends in the industry.