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

2022 Year End Tax Planning Guide For Berkshire hathaway Employees

Healthcare Provider Update: Healthcare Provider for Berkshire Hathaway: UnitedHealth Group Blog Post Paragraph on Potential Healthcare Cost Increases in 2026: As we look toward 2026, Berkshire Hathaway employees and many others in the United States may face significant challenges with healthcare costs. Current projections indicate that average premiums for Affordable Care Act (ACA) marketplace plans could rise sharply, with some states experiencing increases of over 60%. This surge is largely attributed to the possible expiration of enhanced federal subsidies, alongside escalating medical costs driven by factors such as expensive medications and hospital services. Experts warn that without renewed subsidies, millions of consumers could see their premiums more than double, putting healthcare access at risk for a substantial portion of the population. Consequently, proactive steps to manage these anticipated rises, such as optimizing health plan selections and maximizing health savings accounts, will be essential for both employees and employers alike. Click here to learn more

As we approach the end of the year for Berkshire hathaway 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 Berkshire hathaway 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,

“Berkshire hathaway 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 Berkshire hathaway 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 Berkshire hathaway 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 Berkshire hathaway clients to review their paycheck withholdings. It's still important for our Berkshire hathaway 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 Berkshire hathaway 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 Berkshire hathaway 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 Berkshire hathaway 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 Berkshire hathaway 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 Berkshire hathaway 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 Berkshire hathaway clients who cannot make the maximum contribution to their 401(k), try to contribute the amount that Berkshire hathaway 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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Berkshire hathaway-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 Berkshire hathaway 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 Berkshire hathaway 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 Berkshire hathaway 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 Berkshire hathaway clients seek the opinion of their tax consultant or financial advisor to establish whether a Roth conversion is feasible for them. The Berkshire hathaway 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 Berkshire hathaway 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 Berkshire hathaway 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 Berkshire hathaway 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 Berkshire hathaway 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 Berkshire hathaway permits a certain amount to be carried over to the following year.

Take action:

We propose that our Berkshire hathaway 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 Berkshire hathaway 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 merger of the Johns Manville Employees Retirement Plan into the Berkshire Hathaway Consolidated Pension Plan specifically affect the retirement benefits for current employees at Johns Manville? In what ways can eligible employees of Johns Manville leverage the benefits of this merger to maximize their retirement planning?

Impact of Merger on Current Employees' Retirement Benefits: The merger of the Johns Manville Employees Retirement Plan into the Berkshire Hathaway Consolidated Pension Plan does not decrease the pension benefits previously earned by employees under their prior plans. Employees continue to receive the same benefits with the same payment options as provided by their prior plan. Any previous payment elections, beneficiary designations, and qualified domestic relations orders remain effective. This consolidation also maintains the insurance of pension benefits through the federal Pension Benefit Guaranty Corporation.

What are the implications for employees of Johns Manville if they choose to retire early prior to their Normal Retirement Age? How do the specific conditions set forth in the Berkshire Hathaway Consolidated Pension Plan guide early retirees from Johns Manville in making informed decisions regarding their benefit options?

Implications of Early Retirement: Employees of Johns Manville who choose to retire early, before their Normal Retirement Age, can still receive benefits. However, these benefits are adjusted based on the age of retirement. If an employee retires at 60, for instance, their monthly benefit payment from the plan will be reduced by a certain percentage for each month that the benefit payments start before the Normal Retirement Age. This reduction compensates for the longer period over which benefits are expected to be paid.

Given the unique characteristics of the Merged Plan, what should employees at Johns Manville consider when calculating their Average Final Salary, and how does this calculation impact their retirement benefits? Additionally, how is Covered Compensation factored into this adjustment, and what strategies can employees employ to ensure accurate calculations?

Calculation of Average Final Salary and Covered Compensation: When calculating the Average Final Salary for retirement benefits, it includes the highest-paid, five consecutive years out of the last ten years of employment. This calculation impacts the retirement benefits as it forms part of the formula used to determine the pension amount. Additionally, Covered Compensation, which refers to the average of the Social Security wage bases, is used to adjust portions of the salary in the benefits calculation, ensuring that the benefits align with national wage growth trends.

How can employees of Johns Manville navigate the various options available for retirement benefit payments outlined in the Berkshire Hathaway Consolidated Pension Plan? What key points should Johns Manville employees consider regarding the selection of forms of payment and potential tax implications in retirement?

Navigating Retirement Benefit Payment Options: Employees of Johns Manville need to consider the form of payment for their retirement benefits, as different options can have different tax implications and affect monthly income. Options typically include lump sums, annuities, or a combination. Employees should consider their financial needs, tax situation, and life expectancy when choosing the form of payment. Consulting with a financial advisor could be beneficial.

For employees at Johns Manville, what steps should they take to stay informed about their accumulated service and benefit service credits, particularly in relation to the changes brought about by the merger into the Berkshire Hathaway Consolidated Pension Plan? How do vested rights impact their eligibility for retirement benefits?

Staying Informed About Service Credits: To manage the transition and keep track of their service credits post-merger, Johns Manville employees should regularly review their service and benefit statements, maintain communication with the plan administrator, and attend any informational meetings or seminars offered by Berkshire Hathaway. Understanding how service credits are calculated and tracked ensures that employees can accurately plan for retirement.

What is the process for reemployment under the Terms of the Merged Plan for former employees of Johns Manville, and how can they ensure their accumulated benefit service is credited effectively upon rehire? What are the implications of this reemployment on their retirement benefits, particularly concerning their previous employment history?

Reemployment and Accumulated Benefits: Reemployed former employees of Johns Manville should verify how their accumulated benefits are treated upon their rehire. Generally, benefits accumulated during previous periods of employment will be credited upon rehire, but specific plan provisions should be consulted to confirm how reemployment affects accrued benefits and eligibility for additional benefits.

What do the terms of the Berkshire Hathaway Consolidated Pension Plan dictate regarding disability retirement benefits for eligible employees at Johns Manville? How should employees approach the application process for disability benefits, and what criteria do they need to be aware of to qualify?

Disability Retirement Benefits: Eligible employees of Johns Manville who become disabled according to the terms of the plan may qualify for disability retirement benefits. The process involves a determination by the plan administrator, and employees must meet specific criteria outlined in the plan documents to qualify. Understanding these criteria and the required documentation is crucial for accessing disability benefits.

How can employees of Johns Manville ensure they have adequate protection for their beneficiaries under the retirement provisions outlined in the Berkshire Hathaway Consolidated Pension Plan? What specific steps can employees take to secure these benefits, and how can they keep their beneficiary designations updated?

Beneficiary Protections: Employees should regularly review and update their beneficiary designations to ensure that their retirement benefits are distributed according to their wishes upon their death. This includes making any necessary changes following life events such as marriage, divorce, or the birth of a child.

How does participation in the Merged Plan differ for salaried and hourly employees of Johns Manville, and what specific eligibility criteria apply to each group? How can understanding these differences improve retirement planning for employees across the different classifications?

Differences in Participation for Salaried and Hourly Employees: The eligibility and benefits might differ between salaried and hourly employees under the Merged Plan. Understanding these differences helps employees make informed decisions about their retirement planning and benefit utilization.

How can employees of Johns Manville contact the Local Benefits Administrator for assistance regarding their retirement benefits and the contents of their plan documents? What are the recommended methods of communication for inquiries or requests regarding their Merged Plan benefits?

Contacting Local Benefits Administrator: Employees should contact their Local Benefits Administrator for any inquiries or assistance regarding their retirement plan. Keeping the contact information updated and consulting the administrator for guidance on plan provisions and benefit claims is advised for navigating their retirement benefits effectively.

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

Berkshire Hathaway 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. Berkshire Hathaway provides financial planning resources and tools to help employees manage their retirement savings.

Berkshire Hathaway has agreed to a $10 million settlement in a long-running pension dispute involving Acme Brick. The company continues to offer comprehensive retirement benefits, including a defined benefit pension plan and a 401(k) plan. In today's political climate, it is important to stay informed about these benefits.

Berkshire Hathaway does not typically offer RSUs or stock options as part of its employee compensation packages, focusing on other forms of financial incentives and benefits.