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

Healthcare Provider Update: Healthcare Provider for State Street: State Street Corporation collaborates with various healthcare providers to offer employee benefits, typically leveraging its extensive network through insurers. The primary healthcare provider for State Street employees is UnitedHealth Group, which offers services to ensure comprehensive health coverage and support. Potential Healthcare Cost Increases in 2026: As the healthcare landscape evolves, significant cost increases are anticipated in 2026, particularly for those enrolled in Affordable Care Act (ACA) marketplace plans. With the potential expiration of enhanced premium tax credits, many enrollees could face premium hikes exceeding 75%, leading to out-of-pocket costs becoming dangerously unaffordable for millions. Insurers attribute these steep increases to rising medical costs, aggressive premium requests-including New York's staggering 66% increase from UnitedHealthcare-and ongoing pressures from inflation across the healthcare sector. Overall, the combination of these factors underscores a perfect storm of market conditions that could strain consumer budgets significantly come 2026. Click here to learn more

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

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

The 401(k) plan at State Street is a retirement savings plan that allows employees to save a portion of their salary before taxes are deducted.

How can I enroll in State Street's 401(k) plan?

Employees can enroll in State Street's 401(k) plan by accessing the enrollment portal through the company’s HR website or by contacting the HR department for assistance.

What is the company match for State Street's 401(k) plan?

State Street offers a company match for contributions made to the 401(k) plan, typically matching a percentage of employee contributions up to a certain limit.

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

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

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

State Street's 401(k) plan offers a range of investment options, including mutual funds, target-date funds, and other investment vehicles tailored to different risk tolerances.

Can I change my contribution rate to State Street's 401(k) plan?

Yes, employees can change their contribution rates to State Street's 401(k) plan at any time, subject to the plan's guidelines.

How often can I change my investment choices in State Street's 401(k) plan?

Employees can typically change their investment choices in State Street's 401(k) plan on a regular basis, often quarterly or as specified in the plan documents.

What happens to my 401(k) plan if I leave State Street?

If you leave State Street, you can choose to roll over your 401(k) balance to another retirement account, leave it in the State Street plan, or cash it out, subject to tax implications.

Does State Street offer financial education regarding the 401(k) plan?

Yes, State Street provides resources and educational sessions to help employees understand their 401(k) plan options and make informed investment decisions.

What is the vesting schedule for State Street's 401(k) plan?

The vesting schedule for State Street's 401(k) plan determines how long you must work at the company to fully own the employer contributions, which may vary based on tenure.