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

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

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

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

Does Pure Storage match employee contributions to the 401(k) plan?

Yes, Pure Storage provides a matching contribution to the 401(k) plan, which enhances employees' retirement savings.

What is the eligibility criteria for Pure Storage employees to participate in the 401(k) plan?

Most employees at Pure Storage are eligible to participate in the 401(k) plan after completing a specified period of employment.

Can employees at Pure Storage choose how to invest their 401(k) contributions?

Yes, employees at Pure Storage can choose from a variety of investment options within the 401(k) plan.

What is the maximum contribution limit for the Pure Storage 401(k) plan?

The maximum contribution limit for the Pure Storage 401(k) plan is in line with IRS guidelines, which may change annually.

Does Pure Storage allow employees to take loans against their 401(k) savings?

Yes, Pure Storage allows employees to take loans against their 401(k) savings, subject to certain terms and conditions.

What happens to my 401(k) balance if I leave Pure Storage?

If you leave Pure Storage, you can choose to roll over your 401(k) balance to another retirement account or withdraw it, subject to applicable taxes and penalties.

Is there a vesting schedule for the employer match in Pure Storage's 401(k) plan?

Yes, Pure Storage has a vesting schedule for the employer match, which means employees must work for a certain period to fully own the matched funds.

Can Pure Storage employees change their contribution percentage to the 401(k) plan?

Yes, employees at Pure Storage can change their contribution percentage at any time, subject to plan rules.

How often can employees at Pure Storage make changes to their investment allocations in the 401(k) plan?

Employees at Pure Storage can typically make changes to their investment allocations on a regular basis, often daily or monthly, depending on the plan provisions.