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

2022 Year-End Tax Tips Fastenal

Healthcare Provider Update: Healthcare Provider for Fastenal Fastenal, a leading distributor of industrial and construction supplies, typically offers employee healthcare benefits through a self-funded plan, managed by a third-party administrator. This allows them to customize their health benefits while controlling costs, with the objective of improving employee health and productivity. Potential Healthcare Cost Increases in 2026 As we approach 2026, Fastenal and its employees may face significant healthcare cost increases. Premiums in the Affordable Care Act (ACA) marketplace are projected to rise sharply-by as much as 66% in some states-due to various factors such as rising medical costs and the potential expiration of enhanced federal subsidies. This situation could result in many employees seeing out-of-pocket premium payments increase by over 75%, impacting their overall financial well-being and suggesting that Fastenal might need to adapt its healthcare strategies to mitigate employee healthcare expenses in the coming year. Click here to learn more

'For Fastenal employees, proactive tax planning strategies, like deferring income and accelerating deductions, can significantly enhance retirement readiness, and working with an advisor like Kevin Landis from The Retirement Group, a division of Wealth Enhancement Group, can help you make the most of these opportunities.'

'As the tax landscape evolves, it's crucial for Fastenal employees to carefully weigh year-end moves such as contributing to retirement accounts or adjusting withholding, and an advisor like Brent Wolf from The Retirement Group, a division of Wealth Enhancement Group, can guide you in optimizing your tax strategy for long-term financial success.'

In this article we will discuss:

1. Tax strategies for employees and retirees of Fastenal companies, including deferring income and accelerating deductions.
2. Charitable contributions and their impact on tax returns for individuals who itemize deductions.
3. The importance of required minimum distributions (RMDs) and year-end investment decisions.
According to a recent study by the Insured Retirement Institute (IRI), a leading financial research firm, 60% of Baby Boomers plan to continue working in some capacity during retirement. This means that for many employees and retirees of Fastenal companies, tax planning strategies will continue to be relevant well beyond retirement age. It is important for this demographic to consider the impact of their retirement income on their tax liabilities, as well as the tax implications of continuing to work in retirement. With that taken into account, Here are some factors for employees and retirees of Fastenal companies to consider as they evaluate potential tax moves between now and the end of the year.
1. Defer income to next year

Consider opportunities to defer income until 2023, especially if you believe you will be in a reduced tax bracket in 2023. For instance, you may be able to defer an end-of-year bonus or delay the collection of business debts, rent, and service payments. As an employee of Fastenal, doing so may allow you to defer income tax payment until the following year.

2. Accelerate deductions

Employees and retirees of Fastenal should also seek opportunities to accelerate deductions into the current tax year. If you itemize deductions, paying medical expenses, qualifying interest, and state taxes before the end of the year (instead of paying them in early 2023) could affect your 2022 tax return.

3. Make deductible charitable contributions

Generally, if you are an employee of Fastenal and itemize deductions on your federal income tax return, you can deduct charitable contributions up 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 donate and the type of organization to which you donate. (Exceeding quantities may be carried forward for a maximum of five years.)

4. Bump up withholding to cover a tax shortfall

If it appears that you will incur federal income tax for the year as an employee of Fastenal, consider increasing your withholding on Form W-4 for the remainder of the year to cover the shortfall. Time may be limited for Fastenal employees to request a Form W-4 modification and for their employers to implement the change by 2022. The greatest benefit is that withholding is considered to have been paid equitably throughout the year, as opposed to when the dollars are actually deducted from your paycheck. This strategy can be utilized by employees of Fastenal to make up for missed or insufficient quarterly estimated tax payments.

5. Save more for retirement

You can reduce your 2022 taxable income through contributions to a traditional IRA and a 401(k) sponsored by a Fastenal company. If you are an employee of Fastenal and have not already contributed the maximum amount, you should consider doing so. For 2022, Fastenal employees can contribute up to $20,500 to a 401(k) plan ($27,000 if over 50) and up to $6,000 to traditional and Roth IRAs combined ($7,000 if over 50).* The window for 2022 contributions to a Fastenal-sponsored plan typically concludes at the end of the year, whereas the deadline for 2022 IRA contributions is April 18, 2023.

Contributions to a Roth account are not tax-deductible, but qualified Roth distributions are not taxable.

6. Take the required minimum distributions

If you are 72 or older and work for Fastenal, you are generally required to take required minimum distributions (RMDs) from traditional IRAs and Fastenal-sponsored retirement plans (exceptions apply if you are still employed and participating in Fastenal's retirement plan). The deadline for withdrawals is typically the end of the year for most individuals. The penalty for noncompliance is severe: fifty percent of the quantity that was not distributed on time. As an employee of Fastenal, it is imperative that you make these distributions on time to avoid the late payment penalty.

7. Weigh year-end investment moves

Fastenal employees and retirees shouldn't let tax considerations dictate investment decisions. Nonetheless, you should consider the tax implications of any year-end investment decisions. If you have realized net capital gains from the sale of securities at a profit, you may be able to avoid taxation on some or all of these gains by selling negative positions. Any losses in excess of your gains as an employee of Fastenal can be used to mitigate up to $3,000 of ordinary income ($1,500 if your filing status is married filing separately) or carried forward to reduce your tax liability in future years.

Conclusion

Preparing your taxes is like taking care of your health. Just as you need to stay on top of your physical well-being to prevent future health issues, you also need to plan ahead and take the necessary steps to ensure that you're not hit with unexpected tax liabilities in the future. By deferring income, accelerating deductions, making charitable contributions, and contributing to your retirement accounts, you can ensure that your financial health is in good shape for the years ahead. Just as you wouldn't skip your annual check-up, you shouldn't overlook the importance of taking care of your taxes.

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Sources :

1. Weltman, Barbara. '5 Tax Planning Strategies for Your Retirement Income.' Investopedia , 3 Oct. 2022, https://www.investopedia.com/retirement/tax-strategies-your-retirement-income/?utm_source=chatgpt.com .

2. Morgan Stanley. 'Tax-Smart Strategies for Your Retirement.' Morgan Stanley , 2023, https://www.morganstanley.com/articles/tax-strategies-for-retirement?utm_source=chatgpt.com .

3. Vanguard. 'Tax-Efficient Retirement Strategy.' Vanguard , 2023, https://investor.vanguard.com/advice/tax-efficient-retirement-strategy?utm_source=chatgpt.com .

4. Thrivent. '6 Retirement Tax Planning Strategies You Should Know.' Thrivent , 2023, https://www.thrivent.com/insights/taxes/6-retirement-tax-planning-strategies-you-should-know?utm_source=chatgpt.com .

5. New York Life Insurance. 'Tax Planning Strategies for Retirement.' New York Life Insurance , 2023, https://www.newyorklife.com/articles/tax-considerations-in-retirement?utm_source=chatgpt.com .

What type of retirement plan does Fastenal offer to its employees?

Fastenal offers a 401(k) savings plan to help employees save for retirement.

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

Employees can enroll in Fastenal's 401(k) plan through the company's benefits portal or by contacting the HR department for assistance.

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

Yes, Fastenal provides a matching contribution to employee 401(k) contributions, subject to certain limits.

What is the maximum contribution limit for Fastenal's 401(k) plan?

The maximum contribution limit for Fastenal's 401(k) plan is in line with IRS guidelines, which may change annually.

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

Fastenal employees can start contributing to the 401(k) plan after completing their eligibility period, typically within their first year of employment.

Are there any fees associated with Fastenal's 401(k) plan?

Yes, Fastenal's 401(k) plan may have certain fees, which are disclosed in the plan documents provided to employees.

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

Yes, Fastenal allows employees to take loans against their 401(k) savings, subject to the plan's terms and conditions.

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

Fastenal's 401(k) plan offers a variety of investment options, including mutual funds and target-date funds, to suit different risk tolerances.

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

Fastenal employees can change their 401(k) contribution amount at any time, subject to the plan's guidelines.

What happens to Fastenal employees' 401(k) savings if they leave the company?

If Fastenal employees leave the company, they can roll over their 401(k) savings to another retirement account or withdraw the funds, subject to tax implications.

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

Fastenal offers a robust retirement plan for its employees, including the Fastenal Company & Subsidiaries 401(k) and Employee Stock Ownership Plan. This plan allows employees to save for retirement through salary deferrals and includes discretionary matching contributions from the company. Employees can contribute both pre-tax and Roth 401(k) deferrals. Fastenal offers an automatic enrollment feature, enrolling employees with a 5% pre-tax deferral unless they opt out (SEC.gov). Fastenal's 401(k) plan includes various investment options, including mutual funds and company stock. Employees are permitted to invest up to 25% of their incoming contributions in Fastenal common stock, although subsequent transfers are restricted (SEC.gov). The plan also allows participants to make catch-up contributions if they are over 50 years old. Fastenal also has an Employee Stock Ownership Plan (ESOP) incorporated into its 401(k) plan, which enhances employees' retirement savings. Upon retirement or termination, participants can choose to receive distributions in lump sums, partial payments, or installments

Restructuring and Layoffs: Fastenal announced a restructuring plan in early 2024 aimed at streamlining its operations and reducing overhead costs. The company will be consolidating some of its distribution centers and implementing workforce reductions. This move is part of a broader strategy to enhance operational efficiency and adapt to evolving market conditions. The decision to reduce headcount and close certain facilities reflects Fastenal's response to the pressures of a changing economic landscape, highlighting the need for companies to remain agile amidst economic uncertainties. Company Benefits and 401k Changes: Fastenal has made adjustments to its employee benefits and 401k plans in response to the shifting economic environment. The company has modified its 401k matching contributions and adjusted health benefits to better align with its financial goals. These changes are significant as they impact employees' long-term financial planning and retirement readiness. Given the current investment climate and tax considerations, it is crucial for employees to stay informed about these changes to effectively manage their retirement savings and benefits.

Fastenal provides stock options and RSUs to eligible employees as part of their compensation and benefits package. Stock options are granted based on performance and tenure. RSUs are typically awarded to senior management and key employees.

Company's Official Website: Check Fastenal’s official website for their health benefits section, which often includes details about plans, coverage options, and recent updates. Reliable News Sources: Look for news articles, press releases, and reports from reputable sources that mention Fastenal’s health benefits. HR and Benefits Sites: Explore sites that specialize in employee benefits information or HR industry insights, which might have detailed information about Fastenal's health plans. Employee Reviews: Check platforms like Glassdoor or Indeed for employee reviews that might mention specifics about health benefits. Industry Publications: Find articles in industry-specific publications or websites that discuss trends and changes in employee benefits at Fastenal.