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

2022 Year End Tax Planning Guide For Becton Dickinson Employees

Healthcare Provider Update: Healthcare Provider for Becton Dickinson Becton Dickinson and Company (BD) is a global medical technology company that provides a wide range of medical devices, instrument systems, and reagents. While BD does not serve as a healthcare provider itself, it supplies essential products and technologies that healthcare providers utilize. Its offerings include items critical for diagnostics, medication management, and infection prevention, which are crucial for hospitals, outpatient facilities, and laboratories. Potential Healthcare Cost Increases in 2026 for Becton Dickinson In 2026, healthcare costs could rise significantly, impacting Becton Dickinson and its operations. Factors such as the anticipated expiration of enhanced premium subsidies under the Affordable Care Act (ACA) are expected to contribute to steep insurance premium increases, potentially exceeding 75% for many consumers. This scenario may drive more healthcare consumers out of the market, leading to reduced demand for medical devices and products. Coupled with rising medical costs and inflation, Becton Dickinson may face challenges in pricing its products competitively while cushioning the effects of increased healthcare expenditure on its customer base. Click here to learn more

As we approach the end of the year for Becton Dickinson employees, it is important that they optimize their tax planning, from changing their paycheck withholdings to maximizing their retirement account contributions, and consulting with a professional can help with these strategies. According to Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement Group, 'It's crucial that employees of Becton Dickinson companies complete their year-end tasks, such as modifying payroll deductions and maximizing IRAs, and seek professional guidance to optimize these strategies.' As suggested by Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement Group,

“Becton Dickinson employees should take advantage of year-end strategies to minimize their taxable income and consult with an advisor to make sure these actions are in line with their future financial plans.”

Some of the topics included in the article:

1. Paycheck withholdings to avoid tax bill or refund surprises.

2. Ways to decrease your taxable income through retirement savings.

3. Taking required minimum distributions (RMDs) from your retirement accounts if you are 72 or older.

Suggesting to our Becton Dickinson clients that they consider preparing for the upcoming 2023 tax season by taking advantage of the following year-end tax planning strategies. I want to make sure my clients from Becton Dickinson companies take care of these tips by December 31, 2022, and find out if they can in fact lower their tax burden in the spring.

Check your paycheck withholdings

First of all, we recommend our Becton Dickinson clients to review their paycheck withholdings. It's still important for our Becton Dickinson clients to understand that an incorrect W-4 form can lead to either a refund or a tax bill at the end of the year. In 2020, the IRS removed the withholding allowances and allowed employees to specify the amount they want to increase or decrease their federal tax withholding directly. We recommend that our Becton Dickinson clients use the IRS Tax Withholding Estimator to check whether they are paying the correct amount of tax or not and how much refund they can expect. Take action: For those of our Becton Dickinson clients who need to make changes, please submit a new Form W-4 to your workplace indicating the amount of withholding (or withholding) indicated by the Estimator.

Tip:

This is as good a time as any for our Becton Dickinson clients to ensure that their state income tax withholding information (if any) is up to date.

Maximize your retirement account contributions

Next, we suggest our Becton Dickinson clients to maximize their retirement account contributions. Tax-advantaged retirement accounts like traditional IRA or 401(k) plan are funded with pre-tax amounts and compound over the years. That is a great way of investing in your future. They are also helpful at tax time, since any contributions you make to these plans lower your taxable income.

For the current tax year, the maximum allowable 401(k) contributions are the following: $20,500 for ages 49 and below $27,000 for ages 50 and above (including $6,500 catch-up contribution) For the current tax year, the maximum allowable IRA contributions are as follows: $6,000 for ages 49 and below $7,000 for ages 50 and above (including $1,000 catch-up contribution) For any Becton Dickinson clients who have an HSA (health savings account), try to contribute as much as you can to that account (the current limits are $3,650 for individuals, $7,300 for families and an additional $1,000 for individuals 55 years and older).

Take action:

For our Becton Dickinson clients who cannot make the maximum contribution to their 401(k), try to contribute the amount that Becton Dickinson is willing to match. All 401(k) contributions have to be made by December 31 of every year. But, you can make contributions to IRAs and HSAs until the tax filing date in April 2023, a few years from now.

Take any RMDs from your traditional retirement accounts (if you are 72 or older)

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Becton Dickinson-sponsored retirement plans, traditional IRAs, SEP, and SIMPLE IRAs all require RMDs by April 1st of the following year, once you've turned 72. From then on, annual withdrawals must be made by December 31 to prevent a penalty.* RMDs are considered taxable income. If you do not take the RMD, you will face a 50 percent excise tax on the amount you should have withdrawn based on your age, life expectancy, and beginning-of-year account balance.

Take action:

Take your RMD by December 31. Your first withdrawal must be taken on or before April 1 of the following year once you turn 72 to avoid penalties. For those of our Becton Dickinson clients who do not require the cash flow and do not wish to increase their taxable income, you may wish to consider a Qualified Charitable Distribution (QCD) from your qualified account to a public charity. However, these Becton Dickinson clients will not be able to claim the charitable contribution itemized deduction. QCDs are limited to $100,000 per year. Unlike the rules for RMDs, QCD gifts are allowed as early as age 70 1/2 if you are philanthropic.

Explore Roth IRA conversion

Even though one can open and contribute to a Roth IRA depending on the income level, we would like to remind the clients of Becton Dickinson that they can transfer some or all of the assets from a traditional IRA or workplace savings plan (e.g., 401(k)) to a Roth IRA. Roth IRAs can be very helpful to your retirement portfolio; traditional IRAs are taxed at the time of withdrawal in retirement, whereas Roth IRAs are not. This can help you have more control over your cash flow and your future tax planning. An exchange of assets from a qualified account such as 401(k) or traditional IRA to a Roth IRA is classified as a taxable event in the conversion year. The pre-tax amounts converted to the Roth IRA, and all the earnings of the pre-tax amounts, are included in the gross income of the taxpayer and are taxed as ordinary income.

Take action: We propose that these Becton Dickinson clients seek the opinion of their tax consultant or financial advisor to establish whether a Roth conversion is feasible for them. The Becton Dickinson clients who decide to convert their accounts should try to minimize the tax consequences. A strategy is to convert amounts only to the level that you stay in your current tax bracket. You can do Roth IRA conversions over a period of years to control the tax consequences.

Use any remaining balance in your flexible spending account (FSA) to spend it.

Flexible spending arrangements are basically the savings plans for the out-of-pocket expenses on healthcare. An FSA is a pre-tax differential to your medical expenses, so you pay less in taxes. You can deduct this loss against capital gains elsewhere in your portfolio, which means that the capital gains tax you owe is reduced. The idea of the tax-loss harvesting is to possibly shift the income taxes to the future, preferably when you are not working at Becton Dickinson and thus in a lower tax bracket. This way, your portfolio will be able to grow and compound faster than if you had to take the money from it to pay the taxes on its gains.

Take action:

Tax-loss harvesting implies that one must monitor tax loss across a portfolio and the market movements because the opportunity to take tax-loss harvesting can be at any time. These Becton Dickinson clients should seek the help of a financial advisor who will assist them in identifying the losses that can be used to offset gains. *Note: Tax-loss harvesting does not apply to tax-advantaged accounts including traditional, Roth and SEP IRAs, 401(k)s and 529 plans.

Bunching your itemized deductions

Certain expenses, such as the following, can be classified as itemized deductions: Medical and dental expenses. Deductible taxes. Qualified mortgage interest, including points for buyers. Interest on investment income. Interest on investment income. Charitable contributions. Casualty, disaster, and theft losses. In order to itemize, your expenses in each category must be higher than a certain percentage of your adjusted gross income (AGI). For instance, let's assume that you want to itemize your medical expenses. For the current tax year, the threshold for itemizing medical expenses is 7.5% of your adjusted gross income. If the medical expenses are 5% of your AGI, then it will not be beneficial to itemize.

Bunching is a way to reach that minimum threshold. In this example, you could delay 2.5% of your expenses to the following year. Thus, you will be more likely to cross the minimum 7.5% of AGI that next tax season which you will be able to itemize. Take action: For any Becton Dickinson clients who have been waiting on certain medical and dental expenses or charitable contributions, you might want to group these expenses to take the most advantage of itemizing the deductions.

Use any remaining balance in your flexible spending account (FSA)

FSAs are basically bank accounts for out-of-pocket healthcare costs. An FSA is the amount of money you set aside from your salary for medical expenses before you pay taxes on it. When you inform Becton Dickinson how much of each paycheck you want to set aside for your FSA, you should know that any balance remaining in the account on December 31, 2022, will be taxed, and you will also be unable to access the money unless Becton Dickinson permits a certain amount to be carried over to the following year.

Take action:

We propose that our Becton Dickinson clients make sure to schedule any last-minute check-ups and eye exams by December 31, 2022. Get prescription drugs for you and your family. For those of our Becton Dickinson clients who have a balance, try to purchase items allowed under FSA (e.g., contact lenses, glasses, bandages).

Sources:

1. Fidelity Investments. 'Tax-Savvy Withdrawals in Retirement.' Fidelity . www.fidelity.com/viewpoints/retirement/tax-savvy-withdrawals . Accessed 15 Feb. 2025.

2. Adams, Hayden. '5-Step Tax-Smart Retirement Income Plan.' Charles Schwab , 5 Aug. 2024, www.schwab.com/learn/story/5-step-tax-smart-retirement-income-plan . Accessed 15 Feb. 2025.

3. Weltman, Barbara. '5 Tax Planning Strategies for Your Retirement Income.' Investopedia , 23 Sept. 2024, www.investopedia.com/retirement/tax-strategies-your-retirement-income . Accessed 15 Feb. 2025.

4. Vanguard. 'Tax-Efficient Retirement Strategy.' Vanguard , www.investor.vanguard.com/advice/tax-efficient-retirement-strategy . Accessed 15 Feb. 2025.

5. Ameriprise Financial. 'Tax Planning for Retirement.' Ameriprise Financial , www.ameriprise.com/financial-goals-priorities/taxes/how-to-minimize-taxes . Accessed 15 Feb. 2025.

How does the Becton Dickinson and Company defined benefit plan differ from the cash balance plan in terms of eligibility and benefit calculation? Employees at Becton Dickinson and Company should be aware of how their retirement options and benefit calculations are structured, especially considering the historical context and the changes made after

Defined Benefit vs. Cash Balance Plan: The Becton Dickinson and Company defined benefit plan and cash balance plan differ significantly in terms of eligibility and benefit calculations. The defined benefit plan, which was the original format, calculates benefits based on the employee's final average pay, age, and years of service. On the other hand, the cash balance plan, introduced in 2007, provides a hypothetical account balance that grows with defined pay and interest credits. For eligibility, new hires after January 1, 2018, cannot join either plan, reflecting a closure to new entrants. Those rehired or transferred within the company after this date also cannot accrue new benefits under the cash balance plan.

This question encompasses the differences in participation rules, the implications of being hired before or after January 1, 2018, and how various employment classifications affect benefits.

Pension Benefits Calculation: Under the BD Retirement Plan, pension benefits are calculated based on 'Total Compensation,' which includes various forms of income like base salary, bonuses, and other regular compensations. The benefit is determined by 'Credited Service' and 'Vesting Service,' impacting the final benefit amount. Vesting in the plan occurs after five years of service, ensuring that employees are entitled to benefits regardless of subsequent employment duration.

In what ways are pension benefits and service calculated under the Becton Dickinson and Company BD Retirement Plan? The complexities involved in determining the pension benefit calculation are crucial for employees to understand as they plan for retirement. A discussion on how Total Compensation, Credited Service, and Vesting Service impact the final benefit amount will provide clarity to employees regarding their financial planning as they approach retirement.

Maximum Benefit Limits: Employees should be aware of IRS-imposed limits on contributions and benefits under retirement plans. For 2018, the compensation limit recognized for pension calculations was $275,000, adjusted annually for inflation. This affects the projected retirement benefits and requires employees to stay informed about annual adjustments to plan accordingly.

What specific maximum benefit limits should employees at Becton Dickinson and Company be aware of regarding their retirement plans and how do these limits adapt annually? Understanding the implications of IRS limits for defined benefit plans and cash balance plans is vital for employees at Becton Dickinson and Company. This question would delve into how annual adjustments might affect their projected retirement benefits and the importance of staying informed about these limits.

Addressing Discrepancies or Denial of Benefits: If discrepancies or wrongful denials occur concerning retirement benefits, Becton Dickinson and Company employees should contact the Plan Administrator. The process includes filing claims and understanding the rights to appeal under the Employee Retirement Income Security Act (ERISA). This structured approach helps employees rectify issues with their retirement benefits effectively.

How can Becton Dickinson and Company employees address discrepancies in their benefit calculations or if they believe they have been wrongfully denied benefits? The processes for appealing decisions made regarding retirement benefits can greatly impact an employee's financial future. This question would outline the steps employees can take, including contacting the Plan Administrator and the importance of understanding their rights under the Employee Retirement Income Security Act (ERISA).

Role of Committees in Managing the Retirement Plan: The Plan Administrative Committee and the Investment Committee play critical roles in overseeing the BD Retirement Plan. The former handles the plan's administration, ensuring compliance and managing benefit claims, while the latter focuses on the investment of plan assets. Employees can seek clarification or get involved by attending committee meetings or contacting them directly for specific inquiries.

What roles do the Plan Administrative Committee and the Investment Committee play in managing the BD Retirement Plan of Becton Dickinson and Company, and how can employees get involved or seek clarification on their plans? Employees interested in understanding the governance of their retirement plan will benefit from knowing who oversees the administration and investment of their benefits and how they can participate in discussions or seek advice.

Impact of Early Retirement: Early retirement affects the calculation of pension benefits, which are reduced based on the number of years retirement is taken before the normal retirement age. The plan allows for early retirement from age 55 with at least 10 years of service, with benefits reduced to compensate for the longer payout period.

How does the early retirement benefit impact employees at Becton Dickinson and Company, particularly in terms of eligibility and the calculation of reduced benefits? By exploring the conditions under which early retirement is permitted, along with calculations related to the reduction in benefits for taking early retirement, employees can make more informed decisions based on their personal circumstances.

Ensuring Accuracy of Retirement Benefits: To ensure accuracy in the calculation of retirement benefits, especially after changes in personal circumstances such as marital status or address, employees are encouraged to promptly update their information with HR. Regular reviews of their retirement plan statements and maintaining communication with the plan administrator are advisable practices.

What steps should employees of Becton Dickinson and Company take to ensure their retirement benefits remain accurate and up-to-date, especially after a change in personal circumstances? This question addresses the importance of regularly updating personal information and understanding the repercussions of life changes on retirement benefits, ensuring employees are proactive in managing their future.

Alternatives for Non-Eligible Employees: Employees not eligible for the BD Retirement Plan, possibly due to the timing of their hire or their role, should explore other retirement savings options like IRAs or the BD 401(k) Plan. These alternatives provide avenues for retirement savings, even for those not covered under the traditional pension plans.

What alternatives exist for Becton Dickinson and Company employees who are not eligible for the BD Retirement Plan, and how can they plan for retirement adequately? This discussion can help inform employees who may fall outside the eligibility criteria about other retirement savings options, such as Individual Retirement Accounts (IRAs) or employer-sponsored 401(k) plans.

Determining Survivors' Pensions: The survivor's pension is determined by the pre-retirement surviving spouse benefit, which generally provides a monthly benefit of 50% of the employee's pension, payable to the spouse for life after the employee's death. This emphasizes the importance of employees designating beneficiaries and understanding the impact of these decisions on their family's financial security.

In the context of the Becton Dickinson and Company BD Retirement Plan, how are survivors' pensions determined, and what options are available for employees regarding beneficiaries? Employees often overlook the significance of beneficiary designations. This question would clarify the process and options available for ensuring that survivors receive entitled benefits and the financial implications of different choices made regarding pension benefits for spouses and dependent children.

Contacting the Plan Administrator: Employees seeking more information about their retirement benefits should contact the Plan Administrator. Preparedness for such inquiries includes having detailed personal and employment information, understanding their current benefits status, and having specific questions or concerns about their plan benefits.

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

Becton Dickinson announced a restructuring plan that includes significant layoffs and a shift in their global operations strategy. The company aims to streamline its operations and reduce costs amid a challenging economic environment.

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For more information you can reach the plan administrator for Becton Dickinson at 1 Becton Dr Franklin Lakes, NJ 7417; or by calling them at +1 201-847-6800.