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2022 Year-End Tax Tips Old Republic International

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'For Old Republic International 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 Old Republic International 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 Old Republic International 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 Old Republic International 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 Old Republic International 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 Old Republic International, doing so may allow you to defer income tax payment until the following year.

2. Accelerate deductions

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

7. Weigh year-end investment moves

Old Republic International 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 Old Republic International 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 401(k) plan offered by Old Republic International?

The 401(k) plan at Old Republic International is a retirement savings plan that allows employees to save a portion of their salary on a pre-tax basis, helping them build a nest egg for retirement.

How does Old Republic International match employee contributions to the 401(k) plan?

Old Republic International offers a company match on employee contributions, which means that for every dollar an employee contributes, the company will match a certain percentage, up to a specified limit.

What are the eligibility requirements for Old Republic International's 401(k) plan?

Employees at Old Republic International typically become eligible for the 401(k) plan after completing a specified period of service, usually within the first year of employment.

Can employees of Old Republic International change their contribution rates to the 401(k) plan?

Yes, employees of Old Republic International can change their contribution rates to the 401(k) plan at designated times throughout the year.

What investment options are available in Old Republic International's 401(k) plan?

The 401(k) plan at Old Republic International offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to suit different risk tolerances.

Is there a vesting schedule for the employer match in Old Republic International's 401(k) plan?

Yes, Old Republic International has a vesting schedule that determines when employees fully own the employer contributions made to their 401(k) accounts.

How can employees of Old Republic International enroll in the 401(k) plan?

Employees can enroll in the 401(k) plan at Old Republic International by completing the necessary enrollment forms, which are typically available through the HR department or the company’s benefits portal.

What is the maximum contribution limit for Old Republic International's 401(k) plan?

The maximum contribution limit for Old Republic International's 401(k) plan is subject to IRS regulations, which may change annually. Employees should check the latest guidelines for the current limit.

Does Old Republic International offer a Roth 401(k) option?

Yes, Old Republic International offers a Roth 401(k) option, allowing employees to make after-tax contributions to their retirement savings.

What happens to my 401(k) savings if I leave Old Republic International?

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