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2022 Year-End Tax Tips Western Digital

Healthcare Provider Update: Healthcare Provider for Western Digital Western Digital Corporation typically utilizes a range of healthcare services from various providers depending on their location and employee benefits structure. For instance, they have been known to partner with health insurance companies such as UnitedHealthcare and Blue Cross Blue Shield to offer their employees robust healthcare options. Potential Healthcare Cost Increases in 2026 As healthcare costs continue to rise, Western Digital employees may face significant increases in their health insurance premiums in 2026. With the expiration of enhanced federal premium subsidies, many enrollees in the Affordable Care Act (ACA) marketplace could see their monthly premiums spike by over 75%. States are experiencing steep rate hikes, exemplified by requested increases of over 60% in some markets like New York, driven by escalating medical costs and aggressive pricing strategies from insurers. This perfect storm of factors could lead to a considerable financial burden for employees seeking adequate health coverage. Click here to learn more

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

2. Accelerate deductions

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

7. Weigh year-end investment moves

Western Digital 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 Western Digital 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 Western Digital?

The 401(k) plan at Western Digital is a retirement savings plan that allows employees to save for their future by contributing a portion of their salary before taxes.

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

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

How can I enroll in the Western Digital 401(k) plan?

Employees can enroll in the Western Digital 401(k) plan through the company’s benefits portal during the enrollment period or when they first become eligible.

What are the eligibility requirements for the Western Digital 401(k) plan?

To be eligible for the Western Digital 401(k) plan, employees typically need to meet certain criteria, such as being a full-time employee and completing a specified period of service.

What types of investment options are available in the Western Digital 401(k) plan?

The Western Digital 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and company stock.

Can I take a loan against my 401(k) plan with Western Digital?

Yes, Western Digital allows employees to take loans against their 401(k) balance, subject to specific terms and conditions outlined in the plan.

What happens to my 401(k) if I leave Western Digital?

If you leave Western Digital, you can choose to roll over your 401(k) balance to another retirement account, cash out your balance, or leave it in the Western Digital plan if eligible.

How often can I change my contribution amount to the Western Digital 401(k) plan?

Employees can typically change their contribution amount to the Western Digital 401(k) plan during open enrollment periods or as permitted by the plan rules.

Does Western Digital offer financial education resources for 401(k) participants?

Yes, Western Digital provides financial education resources and workshops to help employees make informed decisions about their 401(k) investments.

What is the vesting schedule for Western Digital's 401(k) matching contributions?

The vesting schedule for Western Digital's 401(k) matching contributions may vary, but it generally requires employees to work for a certain number of years before they fully own the matched funds.