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

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

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

The 401(k) plan offered by Walt Disney is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are taken out.

How can Walt Disney employees enroll in the 401(k) plan?

Walt Disney employees can enroll in the 401(k) plan through the company’s benefits portal or by contacting the HR department for assistance.

Does Walt Disney match employee contributions to the 401(k) plan?

Yes, Walt Disney offers a matching contribution to the 401(k) plan, which helps employees maximize their retirement savings.

What is the maximum contribution limit for the Walt Disney 401(k) plan?

The maximum contribution limit for the Walt Disney 401(k) plan is subject to IRS regulations, which may change annually.

When can Walt Disney employees start contributing to their 401(k) plan?

Walt Disney employees can start contributing to their 401(k) plan after completing a specified eligibility period, typically within their first year of employment.

Are there any fees associated with the Walt Disney 401(k) plan?

Yes, there may be administrative fees associated with the Walt Disney 401(k) plan, which are disclosed in the plan documents.

Can Walt Disney employees take loans against their 401(k) savings?

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

What investment options are available in the Walt Disney 401(k) plan?

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

How often can Walt Disney employees change their 401(k) contribution amount?

Walt Disney employees can change their 401(k) contribution amount at designated times throughout the year, typically during open enrollment or after a qualifying event.

What happens to the 401(k) savings if a Walt Disney employee leaves the company?

If a Walt Disney employee leaves the company, they can choose to roll over their 401(k) savings to another retirement account, cash out, or leave the funds in the Walt Disney plan if eligible.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Walt Disney is a leading entertainment company known for its film studios, theme parks, and media networks. The company continues to innovate and expand its entertainment offerings globally.

Walt Disney provides RSUs to certain employees. These RSUs vest over time, encouraging employee retention.