Essential Year-End Tax Strategies for Nordstrom Employees

Healthcare Provider Update: Healthcare Provider for Nordstrom For its healthcare needs, Nordstrom partners primarily with Aetna, Premera, and Kaiser Permanente to provide health insurance plans to its employees. Each of these insurers offers various options, including high-deductible plans accompanied by Health Savings Accounts (HSAs), allowing employees to manage their healthcare expenses more effectively. Potential Healthcare Cost Increases in 2026 In 2026, healthcare costs for Nordstrom employees may see significant increases due to projected hikes in Affordable Care Act (ACA) premiums. Many states are anticipating rate increases of over 20%, with places like New York facing hikes exceeding 66%. The expiration of enhanced ACA subsidies will exacerbate these financial pressures, with projections suggesting that more than 22 million enrolled individuals could see their premiums surge by over 75%. This perfect storm of rising medical costs and subsidy losses will require employees to prepare for a substantial rise in their out-of-pocket healthcare expenses. Click here to learn more

Here are some things for Nordstrom 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
Nordstrom employees must consider opportunities to defer income to next year, particularly if you expect to 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 Nordstrom employee, doing so may enable you to postpone payment of tax on the income until next year. 

 

2. Accelerate deductions
Nordstrom 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 waiting until after year-end) could make a difference on your current-year return.

3. Make deductible charitable contributions
As a Nordstrom 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 Nordstrom 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 Nordstrom employees to request a Form W-4 change and for their employers from Nordstrom to implement it in time. 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 Nordstrom 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 Nordstrom-sponsored retirement plan such as a 401(k) can reduce your taxable income for the current year. As a fortune 500 employee, if you haven't already contributed up to the maximum amount allowed, consider doing so. For 2026, Nordstrom employees can contribute up to $24,500 to a 401(k) plan ($32,500 if you're age 50 or older) and up to $7,500 to traditional and Roth IRAs combined ($8,500 if you're age 50 or older).* Contributions to employer-sponsored plans generally close at the end of the calendar year, while IRA contributions can typically be made until the tax filing deadline in April of the following year.

*Roth contributions are not deductible, but Roth-qualified distributions are not taxable.

 

Tags:  Financial Planning ,  Tax ,  Retirement ,  2022

That same shift from growing assets to drawing them down applies directly to the pension decisions in front of you at Nordstrom. Nordstrom maintains an active defined benefit pension plan, meaning eligible employees continue to accrue benefits based on years of service and compensation. If you are eligible for a lump sum payout, IRS Section 417(e) segment rates determine how the future annuity stream converts to a present-value payment - rising rates compress the lump sum, so monitoring the plan's stability period and lookback month is critical before you lock in your election date. The choice between a single-life annuity, a joint-and-survivor option, or a lump sum (where available) is generally irrevocable once made, and timing that decision relative to interest rate conditions can meaningfully affect your retirement income picture.

On the healthcare side, Nordstrom provides continued medical coverage to eligible retirees, which can bridge the gap between retirement and Medicare eligibility at age 65 or serve as a supplement to Medicare thereafter. Confirming the service and age requirements for retiree coverage, and understanding your premium contribution, is an important step in building an accurate healthcare cost projection. Coordinating Nordstrom's retiree coverage with Medicare Part B and Part D enrollment timing can also reduce duplication and avoid late-enrollment penalties. Connecting your specific Nordstrom benefits situation to a comprehensive retirement income plan - and understanding how each component interacts - gives you the most complete picture of what retirement will look like.