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Enhanced Estate and Gift Tax Benefits for DexCom Employees in 2024

Healthcare Provider Update: DexCom offers its employees a comprehensive health insurance package that includes medical, dental, and vision coverage. Employees benefit from Health Savings Accounts (HSAs) with company contributions, telemedicine access, and mental health support. Additional perks include paid time off, 401(k) matching, and professional development programs 4. Healthcare costs in the United States are projected to continue rising through 2026, with insurers proposing significant premium increases for Affordable Care Act (ACA) plans. A recent analysis found that ACA insurers are seeking a median premium increase of 15% for 2026, marking the largest hike since 2018. This surge is attributed to factors such as the anticipated expiration of enhanced premium tax credits, rising medical costsincluding expensive medications and increased hospital staysand a shift in the risk pool towards higher-cost enrollees. Without the renewal of enhanced subsidies, out-of-pocket premiums for ACA marketplace enrollees could increase by more than 75% on average. Click here to learn more

As we transition into 2024, the landscape of federal gift, estate, and generation-skipping transfer (GST) tax laws has shifted significantly due to major inflation adjustments. For DexCom employees focusing on their financial strategies, these changes present valuable opportunities for enhancing intergenerational wealth transfer and achieving greater tax efficiency.

The Internal Revenue Service (IRS) has raised the lifetime exemption levels for the federal estate tax and the GST tax considerably. Individual exemptions have grown from $12.92 million in 2023 to $13.61 million, a $690,000 increase. Similarly, for married couples, the exemption has surged from $25.84 million to $27.22 million. These adjustments facilitate significant wealth transfers to heirs or direct gifts to grandchildren (via GSTs) without incurring federal estate or GST taxes.

The aligned increase in both the estate tax exemption and the generation-skipping tax exemption allows for direct asset transfers to grandchildren or into trusts for their benefit, helping families circumvent the double taxation of estate taxes on subsequent generations.

However, these augmented exemption amounts are set to expire on December 31, 2025, unless new legislation extends them. Initially quadrupled by the Tax Cuts and Jobs Act of 2017, these exemptions will nearly halve if not renewed. This impending reduction underscores the importance of proactive estate and gift planning soon.

For 2024, the federal gift tax annual exclusion has also seen a roughly 6% increase to $18,000 per recipient, up from $17,000 the previous year. This enables DexCom employees to devise strategic gifting plans that preserve estate value and promote wealth transfer between generations.

With the 2025 sunset date approaching, maximizing these increased exemptions is crucial to save on taxes. Consider utilizing the annual gift tax exclusion, which allows up to $18,000 per recipient in 2024 without impacting your lifetime estate or gift tax exemptions. Additionally, direct payments to medical providers for healthcare or educational institutions for tuition are exempt from gift taxes.

Including a gift tax return (IRS Form 709) is essential for contributions exceeding the annual exclusion, as part of comprehensive estate planning.

DexCom employees should also explore trust-based strategies like lifetime irrevocable trusts, which remove assets from the taxable estate, and Grantor Retained Annuity Trusts (GRATs), where the grantor receives annuity payments for a set period before the remainder passes to beneficiaries, potentially tax-free.

Spousal Lifetime Access Trusts (SLATs) are another option, allowing one spouse to leverage their gift tax exemption to establish a trust for the other, who then accesses the trust's assets.

Engaging with financial advisors is crucial to navigate the complexities of state-specific estate and gift tax laws, which vary widely and affect overall tax obligations and estate planning strategies.

As federal tax exemptions are about to sunset, this is a critical time for DexCom employees to review and possibly revise their estate and gifting strategies. These calculated decisions can lead to more efficient wealth transfer to future generations and significant tax savings.

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When making these choices, it is advisable for professionals and retirees to consult with advisors to formulate their plans in light of current tax rules and potential future changes.

For DexCom employees retiring or nearing retirement, consider establishing a Qualified Personal Residence Trust (QPRT) in 2024. A QPRT allows homeowners to transfer their residence into a trust, residing there for a designated period, potentially reducing the taxable value of their estate. This strategy is particularly valuable ahead of potential reductions in exemption amounts post-2025, enabling high-value assets to be transferred at a reduced tax cost.

Like a gardener preparing for a fruitful season, the upcoming changes in inheritance and gift tax laws in 2024 are an excellent opportunity for DexCom employees to strategically transfer wealth and make impactful gifts. The expanded exemption levels, akin to fertile soil, facilitate the management of estates to minimize tax implications and maximize growth for future generations. Acting now, before these favorable conditions sunset in 2025, is like planting a crop at the optimal time to ensure a bountiful harvest for years to come.

What retirement savings options does DexCom offer to its employees?

DexCom offers a 401(k) savings plan that allows employees to save for retirement through pre-tax and Roth contributions.

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

Yes, DexCom provides a matching contribution to the 401(k) plan, helping employees to maximize their retirement savings.

How can employees at DexCom enroll in the 401(k) plan?

Employees at DexCom can enroll in the 401(k) plan through the company’s HR portal or by contacting the HR department for assistance.

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

DexCom has a vesting schedule that typically requires employees to complete a certain number of years of service before they fully own the matching contributions.

Can DexCom employees take loans against their 401(k) savings?

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

What investment options are available in the DexCom 401(k) plan?

The DexCom 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.

Is there a minimum contribution requirement for the DexCom 401(k) plan?

Yes, DexCom has a minimum contribution requirement for employees who wish to participate in the 401(k) plan, which is outlined in the plan documents.

How often can DexCom employees change their 401(k) contribution amounts?

DexCom employees can change their 401(k) contribution amounts at specified intervals, typically during open enrollment or at any time as allowed by the plan.

What happens to my DexCom 401(k) if I leave the company?

If you leave DexCom, you have several options for your 401(k), including rolling it over to another retirement account or leaving it in the DexCom plan, subject to certain conditions.

Are there any fees associated with the DexCom 401(k) plan?

Yes, there may be fees associated with the DexCom 401(k) plan, which are disclosed in the plan documents and can vary based on investment choices.

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

DexCom offers a 401(k) plan but does not currently provide a defined pension plan for its employees. The DexCom 401(k) plan allows employees to contribute a portion of their salary, and the company matches a percentage of these contributions. As of 2022, the plan's total retirement assets were over $234 million, with 5,430 participants. The plan is accessible to all full-time employees aged 21 and over, with the option to start contributing immediately upon employment. For specific terminology and detailed plan descriptions, DexCom uses standard retirement-related terms like "vesting," "deferral," and "matching contributions." The plan focuses on providing long-term savings opportunities, emphasizing employee participation and the benefits of employer matching.

Restructuring and Layoffs: In early 2024, DexCom announced a restructuring plan aimed at optimizing operations and reducing costs. The company is expected to lay off approximately 5% of its workforce as part of this initiative. This move is a strategic response to the current economic uncertainties and is designed to enhance efficiency and profitability amidst fluctuating market conditions. The importance of addressing this news is heightened by the current economic environment, which is marked by inflationary pressures and changing investment dynamics. Understanding such developments is crucial for assessing the potential impact on employee benefits and job security. Company Benefits and Pension Changes: Alongside the restructuring, DexCom has also made adjustments to its benefits and pension plans. The company has modified its 401(k) match policy, reducing the employer contribution rate from 5% to 3%. Additionally, there have been changes to the pension plan, including a freeze on new pension accruals. These changes reflect broader trends in the industry where companies are reassessing their benefits structures in response to financial pressures. It is essential to monitor these developments as they affect employee retirement planning and long-term financial stability, especially in light of current tax and investment environments.

DexCom provided stock options to executives and key employees, with a four-year vesting schedule. RSUs were granted to align interests with shareholders, typically vesting over three years.

DexCom Careers Page: DexCom's official careers page provides a detailed overview of their employee benefits, including health insurance plans, wellness programs, and other related benefits. Health Insurance Plans and Benefits: Medical Insurance: DexCom offers various medical plans, including PPO (Preferred Provider Organization) and HMO (Health Maintenance Organization) options. Coverage often includes preventive care, emergency services, and specialist visits. Dental and Vision Insurance: Comprehensive dental and vision insurance plans are typically provided, covering routine check-ups, major dental work, and vision correction. Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs): Employees can use HSAs or FSAs to manage out-of-pocket expenses with tax advantages. Telehealth Services: Access to virtual consultations and telemedicine is commonly available.