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WEC Energy Group Retirees: Don't Make These 6 Common Tax Return Mistakes

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Healthcare Provider Update: WEC Energy Group's healthcare provider is the Retirement Group, a division of Wealth Enhancement Group, which assists employees with navigating complex benefit structures and potential healthcare challenges. In 2026, employees at WEC Energy Group may face significant healthcare cost increases due to projected premium hikes in the ACA marketplace, influenced by the expiration of enhanced federal subsidies, rising medical costs, and the push from insurers seeking higher premiums. As a result, many employees might see a steep rise in out-of-pocket expenses, with some forecasts suggesting increases could exceed 75%. To navigate these financial pressures, employees are encouraged to familiarize themselves with upcoming benefit changes and strategically review their healthcare options. Click here to learn more

When it comes to financial planning, especially for WEC Energy Group employees who are nearing or through retirement, tax management is essential to ensuring a comfortable and financially stable future. Due to the intricacy of tax regulations, WEC Energy Group retirees and their advisors may fail to recognize chances for tax savings or, on the other hand, may make mistakes that result in an increased tax liability. This post explores six common errors seen on retirees' tax returns and provides advice on how to potentially avoid them and make the most out of your tax plan.


Myths Regarding Deductions

It's common to misunderstand the choice between choosing the standard deduction versus itemizing deductions. Due to changes in tax legislation after 2018, WEC Energy Group retirees like the hypothetical John and Linda may not benefit from itemizing deductions even though they have a mortgage. This is a common circumstance. It is important to determine if the total of all possible itemized deductions—medical costs that are greater than 7.5% of AGI, mortgage interest, local and state taxes, and charitable contributions—exceeds the standard deduction limit, which for couples over 65 in 2023 was over $30,000.

Distributions from Qualified Charities: An Unused Possibility

Qualified Charitable Distributions (QCDs) are a useful tactic for WEC Energy Group retirees who want to give to charity in an effective manner. This is especially true for people who no longer itemize deductions. But eligibility starts at seventy-five, and one common mistake is to declare these distributions incorrectly on tax returns. Accurate Form 1040 documentation is necessary to guarantee that these contributions are acknowledged and optimized for taxation.


Unexpected Tax Obligations

Many WEC Energy Group retirees with inefficient investment portfolios or phantom gains have unanticipated tax problems. For example, even in years when the market is down, capital gains distributed by mutual funds might result in large tax bills. Investing in individual stocks or Exchange-Traded Funds (ETFs) in taxable accounts can provide investors with greater control over their tax obligations and the flexibility to choose when to realize gains.

Ignoring Cost Basis in Stock Transactions

Unnecessary tax burdens may result from selling equities without knowing the cost basis or failing to report it. Investments that were purchased before to the 2011 mandate requiring custodians to monitor this data often do not have a documented cost basis, which could result in the entire selling value being subject to gain taxation. Tax ramifications can be reduced by determining and correctly disclosing the cost basis or by taking these assets into account when making charitable contributions.

Medicare Premiums Tied to Income

The income-based premiums for Medicare Parts B and D are based on the income recorded two years prior to the current year. By submitting an SSA-44 form, WEC Energy Group retirees who are going through a major change in income—such as going into retirement—may be eligible for modified premiums. Unnecessary increases in Medicare premiums can be potentially avoided with awareness and proactive management of income levels.

Making Use of Tax Valleys

This 'tax valley,' where lower income levels offer potential for tax savings, is the period of time between retirement and required withdrawals from retirement plans. Tax advantages that are not accessible during higher income periods can be obtained by strategies like Roth conversions, taking distributions, or realizing capital gains during these years.

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In conclusion, even though handling tax planning and compliance may seem overwhelming, by being proactive and aware of typical pitfalls, one may greatly improve their financial future. WEC Energy Group retirees have many options to reduce their tax obligations and safeguard their financial resources for the future. These options include fine-tuning deduction strategies, maximizing charitable contributions, managing investment portfolios with an eye toward tax implications, accurately reporting all transactions, and strategically managing income to influence Medicare premiums and tax rates.

The effect of a retiree's place of residence on their tax obligations is one tactic that is frequently disregarded. Significant tax benefits are available to retirees in some jurisdictions, such as no state income tax, Social Security income exemptions, and advantageous treatment for pension and retirement account withdrawals. Relocating to a state with low taxes may save you a lot of money on taxes. Assessing state tax laws should be a crucial step in retirees' tax planning process as they make financial plans for the future. This is particularly important to take into account because it can impact estate planning techniques as well as retirement income in general. According to AARP's February 2023 report, 'States with the Best Tax Breaks for Retirees,'

Managing your retirement tax returns is like sailing a ship across the ocean. To safeguard their financial security, retirees must navigate the intricate waters of tax laws and regulations, much as an experienced sailor must be aware of shifting winds, currents, and potential hazards. Errors such as misjudging the impact of investment decisions on taxes, mishandling stock sales, maximizing charitable distributions, underestimating the influence of income on Medicare premiums, and not taking advantage of lower tax years are comparable to missing the good times, hitting undiscovered obstacles, or deciding on an ineffective path. To ensure a prosperous voyage during the retirement years, every action on this journey demands foresight, planning, and a grasp of the surrounding environment to maximize benefits and potentially avoid dangers.

Not Individualized tax advice. Discuss your situation with a qualified tax professional.

What is the 401(k) plan offered by WEC Energy Group?

The 401(k) plan at WEC Energy Group is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are deducted.

How can I enroll in the WEC Energy Group 401(k) plan?

Employees can enroll in the WEC Energy Group 401(k) plan by completing the enrollment process online through the company’s benefits portal.

Does WEC Energy Group offer any matching contributions to the 401(k) plan?

Yes, WEC Energy Group offers matching contributions to the 401(k) plan, which helps employees boost their retirement savings.

What is the vesting schedule for the WEC Energy Group 401(k) plan?

The vesting schedule for the WEC Energy Group 401(k) plan typically requires employees to work for a certain number of years before they fully own the company’s matching contributions.

Can I change my contribution amount to the WEC Energy Group 401(k) plan?

Yes, employees can change their contribution amounts to the WEC Energy Group 401(k) plan at any time, subject to plan rules.

What investment options are available in the WEC Energy Group 401(k) plan?

The WEC Energy Group 401(k) plan offers a variety of investment options, including mutual funds, stocks, and bonds, allowing employees to choose based on their risk tolerance.

Is there a loan option available in the WEC Energy Group 401(k) plan?

Yes, the WEC Energy Group 401(k) plan may allow employees to take loans against their account balance under certain conditions.

What happens to my 401(k) account if I leave WEC Energy Group?

If you leave WEC Energy Group, you will have several options for your 401(k) account, including rolling it over to another retirement account or leaving it with WEC Energy Group.

How can I access my 401(k) account information with WEC Energy Group?

Employees can access their 401(k) account information through the WEC Energy Group benefits portal or by contacting the HR department.

Are there any fees associated with the WEC Energy Group 401(k) plan?

Yes, the WEC Energy Group 401(k) plan may have administrative fees and investment-related fees, which are disclosed in the plan documents.

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For more information you can reach the plan administrator for WEC Energy Group at , ; or by calling them at .

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