Healthcare Provider Update: Healthcare Provider for PayPal PayPal leverages various health insurance providers for its employee benefits program, typically offering options through major health insurers. While specific details can vary based on location and employee needs, prominent providers such as UnitedHealthcare and Cigna are commonly utilized by large companies like PayPal to ensure a comprehensive suite of healthcare options for their workforce. Healthcare Cost Increases in 2026 As we look ahead to 2026, healthcare costs are anticipated to surge dramatically due to a confluence of factors impacting the Affordable Care Act (ACA) marketplace. Record increases in insurance premiums-some exceeding 60%-are driven by escalating medical costs, the prospective expiration of enhanced federal subsidies, and aggressive rate hikes from major insurers. The failure to renew these subsidies could see out-of-pocket premiums for millions of Americans rising by over 75%, placing significant financial pressure on middle-income families. As the healthcare landscape evolves, stakeholders must navigate these challenges with a proactive approach to manage costs effectively. Click here to learn more
'Gifting is a great way to transfer wealth but if it is not done correctly, it can result in taxes being paid on the wrong account,' says Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement Group.
“High net worth individuals are looking for ways to help their families now rather than later, but they need to make sure their generosity is consistent with a good financial plan,” says Mavar.
In this article, we will discuss:
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The tax consequences of giving away money during one’s lifetime as opposed to on death.
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Strategies for enhancing tax exemptions when giving out large amounts of money.
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The short and long-term effects of gifting on both the donor and the recipient.
The employees of PayPal companies are often involved in the financial planning and therefore try to make significant gifts of money to their families while they are still alive rather than only through bequests after death. This trend is easy to explain: it is fun to see the results of such generosity in the modern world, for instance, to help with buying a home in the current real estate market or to pay for college for grandchildren. However, this approach comes with its own set of challenges, especially in terms of tax efficiency.
Giving Wisely: How to Increase the Impact of the Gift While Minimizing the Tax Risk
One of the main benefits of bequeathing assets like stocks is the “step up” in basis, which sets a new value of the asset at the market price at the time of the owner’s death. This means that heirs can sell the inherited stocks at the current high prices without having to pay capital gains tax on the proceeds as long as the sale price equals the stepped up basis. On the other hand, gifts of stocks during one’s lifetime are not exempt from this adjustment. The original purchase price, or basis, stays there, which can result in very high capital gains taxes if the stock is sold when market prices are high.
However, if the gift recipient’s income is below the following limits: $47,025 for singles and $94,050 for married couples filing jointly, they can sell these stocks without having to pay capital gains taxes on them. This creates a perfect situation for PayPal employees to help their family members who are starting their careers or earn less than these limits. It is important to avoid such transactions as they may lead to higher taxable income and, therefore, taxes.
Taking Full Advantage of the Gift Exemptions
According to the current rules, an individual can make a gift of up to $18,000 per recipient in 2024 without having to report the gift on his or her tax return and have it count against the taxpayer’s lifetime gift tax exclusion. In the case of married couples, the split gifting technique enables each spouse to make an $18,000 gift to the same person, thus enabling the two to give $36,000 every year tax free. In case gifts are made which are more than these figures, the excess must be reported on IRS Form 709, however, taxes are not due until the exclusion amount is exceeded which is currently $13.61 million. The annual exclusion is also available for gifts that are made during the year of death and in the year following death.
Another way to avoid the annual gift tax exemption is to make the payment directly for the health or education of another person. For instance, payments made directly to educational institutions are not considered as part of the $18,000 annual exclusion for gifts and, therefore, PayPal employees can provide generous support without compromising their lifetime gift exemption. This way, the money is used precisely for its intended purpose and there is no chance that the recipient will spend it on something else or become financially dependent.
Assessing the Financial Impacts of Gift Giving
This means that PayPal employees should also consider the tax consequences of the financial gift that they are planning to give to their recipient. Support should always be given with the aim of empowering the recipient, not enabling them or making them dependent. This assessment is important in order to determine if the giving is helping or harming the recipient.
The donor’s financial stability is just as important as the recipient’s. Such gifts can be made sustainable by a financial plan that has been developed by professional advisors. In this way, PayPal employees can ensure that they are able to give in a way that is consistent with their financial future.
In conclusion, it is an excellent practice to give but it is advisable to know the strategies that can be employed in order to reduce the amount of tax paid and at the same time, achieve the desired results. By looking at the short and long-term consequences of their generosity, PayPal employees can make reasonable decisions that will benefit them and their families. For those who are involved in the process of financial gifting, more specific plans and options can be provided by thorough planning tools and the advice of financial professionals.
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An IRA Qualified Charitable Distribution (QCD) can also be a useful approach, especially for retirees. An individual who has reached the age of 70½ can transfer up to $100,000 each year from his or her IRA to a charitable organization. This can help achieve charitable goals while also potentially leaving the donor in a lower tax bracket, as the donation is not included in taxable income and satisfies RMDs. This approach is in harmony with strategic estate planning and holds the advantage of not affecting non-charitable beneficiaries.
Sources:
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Internal Revenue Service. 'Gift Tax.' IRS.gov, 2024, www.irs.gov/businesses/small-businesses-self-employed/gift-tax .
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Investment Company Institute. '2024 Annual Report on U.S. Retirement Market.' ICI.org, 2024, www.ici.org/research .
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Wealth Enhancement Group. 'Estate Planning and Wealth Transfer Strategies.' WealthEnhancement.com, 2024, www.wealthenhancement.com/insights .
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U.S. Securities and Exchange Commission. 'Understanding Capital Gains Tax.' SEC.gov, 2024, www.sec.gov/investor .
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National Association of Estate Planners & Councils. 'Best Practices in Lifetime Wealth Transfers.' NAEP.org, 2024, www.naepc.org/articles .
What is the 401(k) plan offered by PayPal?
PayPal offers a 401(k) plan that allows employees to save for retirement through pre-tax contributions, which can grow tax-deferred until withdrawal.
How does PayPal match employee contributions to the 401(k) plan?
PayPal provides a matching contribution to employees' 401(k) plans, typically matching a percentage of the employee's contributions up to a certain limit.
Can employees at PayPal choose how to invest their 401(k) contributions?
Yes, PayPal allows employees to choose from a variety of investment options for their 401(k) contributions, including mutual funds and target-date funds.
What is the eligibility requirement for PayPal’s 401(k) plan?
Employees at PayPal are generally eligible to participate in the 401(k) plan after completing a specified period of service, often within the first year of employment.
How can PayPal employees enroll in the 401(k) plan?
PayPal employees can enroll in the 401(k) plan through the company's benefits portal, where they can select their contribution amount and investment options.
What is the maximum contribution limit for PayPal employees under the 401(k) plan?
The maximum contribution limit for PayPal employees under the 401(k) plan is subject to IRS guidelines, which can change annually.
Does PayPal offer a Roth 401(k) option?
Yes, PayPal provides a Roth 401(k) option, allowing employees to make after-tax contributions that can grow tax-free.
What happens to my PayPal 401(k) if I leave the company?
If you leave PayPal, you can choose to roll over your 401(k) balance to another retirement account, cash out, or leave it in the PayPal plan if eligible.
Can PayPal employees take loans against their 401(k) savings?
Yes, PayPal allows employees to take loans against their 401(k) savings, subject to specific terms and conditions set by the plan.
Are there any fees associated with managing the PayPal 401(k) plan?
Yes, there may be administrative fees and investment-related fees associated with the PayPal 401(k) plan, which are disclosed in the plan documents.