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

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

Healthcare Provider Update: Healthcare Provider for ServiceNow ServiceNow employees generally utilize various healthcare providers, depending on their selected health plans. The specific healthcare provider can vary by region and the insurance options offered by ServiceNow. While the company facilitates access to different plans through insurance carriers like UnitedHealthcare, Cigna, and others, employees typically select plans that best fit their healthcare needs and financial situations. Anticipated Healthcare Cost Increases for 2026 In 2026, ServiceNow employees are likely to face substantial increases in healthcare costs, reflecting broader trends in the Affordable Care Act (ACA) marketplace. With some states predicting premium hikes of over 60%, these changes could significantly impact out-of-pocket expenses. The potential expiration of enhanced federal subsidies combined with rising medical costs means many employees may experience premium increases of up to 75%, underscoring the importance of prudent financial planning in light of impending healthcare expenses. Click here to learn more

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

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

The 401(k) plan at ServiceNow is a retirement savings plan that allows employees to save a portion of their salary on a tax-deferred basis.

How does ServiceNow match employee contributions to the 401(k) plan?

ServiceNow offers a matching contribution to the 401(k) plan, typically matching a percentage of employee contributions up to a certain limit.

Are there any eligibility requirements for ServiceNow's 401(k) plan?

Yes, employees must meet certain eligibility criteria, such as length of service and employment status, to participate in ServiceNow's 401(k) plan.

Can employees at ServiceNow change their contribution percentage to the 401(k) plan?

Yes, employees at ServiceNow can change their contribution percentage to the 401(k) plan at any time, subject to plan rules.

What investment options are available in ServiceNow's 401(k) plan?

ServiceNow's 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.

Does ServiceNow provide financial education resources for employees regarding the 401(k) plan?

Yes, ServiceNow provides financial education resources and tools to help employees make informed decisions about their 401(k) investments.

When can employees at ServiceNow start contributing to the 401(k) plan?

Employees at ServiceNow can typically start contributing to the 401(k) plan after they meet the eligibility requirements, often within their first month of employment.

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

If you leave ServiceNow, you have several options for your 401(k) account, including rolling it over to another retirement account, cashing it out, or leaving it in the ServiceNow plan if allowed.

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

Yes, ServiceNow has a vesting schedule for matching contributions, which means employees must work for a certain period before they fully own the matched funds.

Can employees take loans against their 401(k) plan at ServiceNow?

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