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

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

2. Accelerate deductions
NCR 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 NCR 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 NCR 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 NCR employees to request a Form W-4 change and for their employers from NCR 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 NCR 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 NCR-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, NCR 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 NCR-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 NCR employee age 72 or older, you generally must take required minimum distributions (RMDs) from traditional IRAs and NCR-sponsored retirement plans (special rules apply if you're still working and participating in NCR'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
NCR 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 NCR 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 NCR 401(k) plan?

The NCR 401(k) plan is a retirement savings plan that allows NCR employees to save for retirement through pre-tax contributions, which can grow tax-deferred until withdrawal.

How can I enroll in the NCR 401(k) plan?

You can enroll in the NCR 401(k) plan by visiting the employee benefits portal or contacting the HR department for assistance with the enrollment process.

What types of contributions can I make to the NCR 401(k) plan?

NCR employees can make pre-tax contributions, Roth (after-tax) contributions, and potentially catch-up contributions if they are age 50 or older.

Does NCR offer a company match for the 401(k) contributions?

Yes, NCR offers a company match on employee contributions to the 401(k) plan, which helps to enhance your retirement savings.

How does the NCR company match work?

The NCR company match typically matches a percentage of your contributions up to a certain limit, which is outlined in the plan documents.

When can I start contributing to the NCR 401(k) plan?

You can start contributing to the NCR 401(k) plan after you have completed the eligibility requirements, which are detailed in the employee handbook.

Can I change my contribution amount to the NCR 401(k) plan?

Yes, NCR allows employees to change their contribution amounts at any time throughout the year, subject to plan rules.

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

The NCR 401(k) plan offers a variety of investment options, including mutual funds, index funds, and target-date funds, allowing employees to choose based on their risk tolerance.

Is there a vesting schedule for the NCR company match?

Yes, NCR has a vesting schedule for the company match, meaning you must work for NCR for a certain period before you fully own the matched contributions.

How can I access my NCR 401(k) account?

You can access your NCR 401(k) account online through the plan's designated website or mobile app, where you can view your balance and make changes.