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

2022 Year-End Tax Tips General Electric

Healthcare Provider Update: Healthcare Provider for General Electric General Electric (GE) employees typically have access to healthcare coverage through their employer-sponsored health plans. One of the prominent providers for GE is Cigna Healthcare, which offers a range of health insurance plans including medical, dental, and vision coverage tailored to accommodate GE employees. Potential Healthcare Cost Increases in 2026 As we approach 2026, General Electric employees should brace for significant increases in healthcare costs. With insurance companies projecting premium hikes up to 66% in certain states, coupled with the potential expiration of enhanced federal subsidies, many workers could see their out-of-pocket expenses soar. A survey revealed that over half of employers plan to raise deductibles and out-of-pocket maximums, making it essential for GE employees to review their benefit options early and strategize for the rising costs. Failing to adapt could result in substantially higher healthcare spending for families at a time when affordability is more critical than ever. Click here to learn more

'For General Electric 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 General Electric 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 General Electric 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 General Electric 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 General Electric 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 General Electric, doing so may allow you to defer income tax payment until the following year.

2. Accelerate deductions

Employees and retirees of General Electric 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 General Electric 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 General Electric, consider increasing your withholding on Form W-4 for the remainder of the year to cover the shortfall. Time may be limited for General Electric 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 General Electric 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 General Electric company. If you are an employee of General Electric and have not already contributed the maximum amount, you should consider doing so. For 2022, General Electric 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 General Electric-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 General Electric, you are generally required to take required minimum distributions (RMDs) from traditional IRAs and General Electric-sponsored retirement plans (exceptions apply if you are still employed and participating in General Electric'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 General Electric, it is imperative that you make these distributions on time to avoid the late payment penalty.

7. Weigh year-end investment moves

General Electric 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 General Electric 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 is the primary purpose of General Electric's 401(k) Savings Plan?

The primary purpose of General Electric's 401(k) Savings Plan is to help employees save for retirement by allowing them to contribute a portion of their salary into a tax-advantaged account.

How can employees of General Electric enroll in the 401(k) Savings Plan?

Employees of General Electric can enroll in the 401(k) Savings Plan by accessing the company’s benefits portal and following the enrollment instructions provided there.

Does General Electric offer matching contributions to the 401(k) Savings Plan?

Yes, General Electric offers matching contributions to the 401(k) Savings Plan, which helps employees increase their retirement savings.

What types of investment options are available in General Electric's 401(k) Savings Plan?

General Electric's 401(k) Savings Plan typically offers a range of investment options, including mutual funds, stocks, and bonds, allowing employees to choose based on their risk tolerance.

When can employees of General Electric start contributing to the 401(k) Savings Plan?

Employees of General Electric can start contributing to the 401(k) Savings Plan after they have completed their eligibility requirements, which usually include a waiting period.

What is the maximum contribution limit for General Electric's 401(k) Savings Plan?

The maximum contribution limit for General Electric's 401(k) Savings Plan is subject to IRS regulations and may change annually. Employees should refer to the latest IRS guidelines for the current limit.

Can employees of General Electric take loans against their 401(k) Savings Plan?

Yes, General Electric allows employees to take loans against their 401(k) Savings Plan, subject to certain conditions and limits set by the plan.

How does General Electric's 401(k) Savings Plan handle employee contributions?

General Electric's 401(k) Savings Plan allows employees to set a percentage of their salary to be automatically deducted and contributed to their retirement account.

What happens to the 401(k) Savings Plan if an employee leaves General Electric?

If an employee leaves General Electric, they can choose to roll over their 401(k) Savings Plan balance to another retirement account, cash out, or leave the funds in the plan if permitted.

Is there a vesting period for General Electric's matching contributions in the 401(k) Savings Plan?

Yes, General Electric has a vesting schedule for matching contributions, meaning employees must work for a certain period before they fully own those contributions.

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

General Electric offers both a traditional defined benefit pension plan and a defined contribution 401(k) plan. The defined benefit plan provides retirement income based on years of service and final average pay. The 401(k) plan features company matching contributions and various investment options, including target-date funds and mutual funds. GE has frozen its defined benefit pension plan for new hires, shifting towards enhancing the defined contribution plan. Employees have access to financial planning tools and resources.

GE is continuing its restructuring efforts, which include significant layoffs and divestitures to streamline operations. The company is enhancing its retirement benefits, including 401(k) plans with company match and improved healthcare options. Staying knowledgeable about these benefits is crucial in the current political climate.

General Electric grants RSUs that vest over several years, giving employees shares upon vesting. They also provide stock options, allowing employees to buy shares at a set price.