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

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

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

The 401(k) plan offered by Sally Beauty Holdings is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are deducted.

How can employees of Sally Beauty Holdings enroll in the 401(k) plan?

Employees of Sally Beauty Holdings can enroll in the 401(k) plan by completing the enrollment process through the company’s HR portal or by contacting the HR department for assistance.

Does Sally Beauty Holdings offer a company match for the 401(k) contributions?

Yes, Sally Beauty Holdings offers a company match for employee contributions to the 401(k) plan, which helps employees save more for retirement.

What is the maximum contribution limit for the 401(k) plan at Sally Beauty Holdings?

The maximum contribution limit for the 401(k) plan at Sally Beauty Holdings is in accordance with IRS guidelines, which can change annually.

Can employees of Sally Beauty Holdings take loans against their 401(k) savings?

Yes, employees of Sally Beauty Holdings may have the option to take loans against their 401(k) savings, subject to certain terms and conditions.

What investment options are available in the Sally Beauty Holdings 401(k) plan?

The Sally Beauty Holdings 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.

How often can employees change their contribution amounts to the Sally Beauty Holdings 401(k) plan?

Employees of Sally Beauty Holdings can change their contribution amounts to the 401(k) plan at any time, subject to the plan’s guidelines.

What happens to the 401(k) savings if an employee leaves Sally Beauty Holdings?

If an employee leaves Sally Beauty Holdings, they can roll over their 401(k) savings into another retirement account, cash out, or leave the funds in the plan if allowed.

Is there a vesting schedule for the company match in the Sally Beauty Holdings 401(k) plan?

Yes, there is a vesting schedule for the company match in the Sally Beauty Holdings 401(k) plan, which determines when employees fully own the matched contributions.

How can employees of Sally Beauty Holdings check their 401(k) account balance?

Employees of Sally Beauty Holdings can check their 401(k) account balance by logging into the plan’s online portal or by contacting the plan administrator.