Healthcare Provider Update: Syneos Health and Upcoming Healthcare Costs Healthcare Provider for Syneos Health: Syneos Health primarily collaborates with multiple healthcare providers across various sectors in the healthcare industry, including pharmaceutical companies, biotechnology firms, and medical device manufacturers. Their services typically encompass clinical development, commercialization, and consulting services to help healthcare organizations efficiently manage their clinical trials and product launches. Potential Healthcare Cost Increases in 2026: In 2026, Syneos Health employees may face significant increases in healthcare costs driven by expected premium hikes in ACA marketplace plans. These could exceed 60% in some states, resulting from higher medical expenses and the potential expiration of enhanced federal premium subsidies. With insurers projecting medical cost trends between 7% and 10%, employees should prepare for an increased financial burden. Adjustments in company benefits, including higher deductibles and out-of-pocket maximums, may further impact out-of-pocket expenses, urging employees to carefully review benefit changes and make informed plan selections to navigate the rising costs effectively. Click here to learn more
When Syneos Health employees sell appreciated assets such as stocks or real estate, they might face significant capital gains taxes. However, an effective tax reduction strategy known as an upstream transfer can be used. This involves transferring these assets to one's parents and later reclaiming them, potentially lowering the taxable amount. This method proves especially beneficial for those with substantial wealth, as it can reduce capital gains and potentially double the amount that their children inherit without triggering estate taxes. Here's a detailed analysis of how upstream transfers work, their benefits, and the associated risks.
Understanding Upstream Transfers
For Syneos Health employees who have seen a significant increase in the value of their assets over time, transferring these assets can result in hefty capital gains taxes. In the United States, capital gains tax is calculated based on the difference between the sale price of an asset and its original purchase price (known as the cost basis). Long-term capital gains tax can be as high as 23.8%, including the net investment income tax. (Source: IRS - Capital Gains Tax Rates)
Upstream transfers benefit from a tax exemption that allows for a step-up in basis upon inheritance. This means that when an individual inherits an asset, its cost basis is adjusted to its market value at the time of the decedent’s death. This adjustment can significantly reduce the taxable amount on any capital gains when the asset is sold. (Source: IRS - Inherited Property Basis)
For instance, consider a Syneos Health employee who holds stock that has appreciated by $1 million since purchase. If sold, they would face about $238,000 in taxes at a 23.8% rate. However, by transferring the stock to their parents and reclaiming it after their demise, the employee would only be taxed on any appreciation that occurs after their parents' death, potentially minimizing capital gains tax liabilities.
Tax Concerns and Estate Planning Advantages
One major advantage of upstream planning for Syneos Health employees is its ability to reduce or eliminate capital gains taxes. However, this strategy also offers significant estate planning benefits. The current estate tax exemption is set at $13.61 million per individual (or $27.22 million for married couples), allowing individuals to transfer or acquire assets up to this threshold without incurring estate taxes. (Source: IRS - Estate Tax Exemption Limits)
Wealthy families can use additional transfers to reduce estate tax deductions. By transferring their assets to parents who have not yet used their tax exemption, families can preserve more wealth from estate taxes. The popularity of asset transfers has increased since the federal estate tax exemption status was introduced by the Tax Cuts and Jobs Act of 2017. However, this increased exemption is scheduled to expire at the end of 2025 unless extended by Congress, prompting many to consider this strategy before the exemption amount decreases. (Source: Tax Cuts and Jobs Act - IRS Summary)
Essential Details and Risks
While upstream transfers are helpful for tax reduction, they also involve risks. A primary concern is the potential loss of control over the assets when transferred to parents. In most cases, parents have the decision-making power regarding their assets, including their transfer or sale during their lifetime. This setup allows parents to decide to share the estate with other successors, such as a future spouse or other children. Moreover, parents’ creditors could claim the assets, complicating the situation further.
Additionally, family dynamics play a crucial role in the success of upstream planning. The involvement of multiple family members, including siblings and spouses, can lead to conflicts and disagreements. For example, parents might alter their estate plan to favor one child, even if it was another who originally provided the assets. Open and transparent communication among all parties is essential to minimize the potential for family conflict.
Timing and Legal Considerations
Timing is another critical factor in upstream transfers. Typically, these transfers are most effective when parents are older or have limited longevity. The strategy is usually recommended when parents are within their last seven years of life and are not expected to live beyond five years. However, if parents pass away within a year after the asset transfer, the basis step-up is disallowed, undermining one of the strategy’s main benefits. (Source: IRS - Step-Up in Basis Rules)
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Furthermore, the value of transferred assets can fluctuate over time, as can the estate tax exemption. If assets significantly appreciate after the transfer or if the estate tax deduction is reduced, an unexpected tax liability could occur for the family. This underscores the importance of a rigorous plan and ongoing monitoring of the situation to keep the transfer tax-efficient.
In Conclusion
Future transfers offer an effective strategy for reducing tax liabilities on capital gains and enhancing wealth transmission to future generations. However, this method requires careful consideration of the legal, financial, and family dynamics involved. Wealthy individuals, including those at Syneos Health considering an upstream plan, should consult with experienced estate planning professionals to determine if this strategy aligns with their overall financial goals and family circumstances. Proper planning and implementation can make upstream transfers a valuable tool in a comprehensive tax and estate planning strategy.
What is the 401(k) plan offered by Syneos Health?
The 401(k) plan at Syneos Health is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are taken out, helping them prepare for retirement.
Does Syneos Health match contributions to the 401(k) plan?
Yes, Syneos Health offers a matching contribution to the 401(k) plan, which helps employees increase their retirement savings.
How can I enroll in the Syneos Health 401(k) plan?
Employees can enroll in the Syneos Health 401(k) plan by completing the enrollment process through the company’s HR portal or by contacting the HR department for assistance.
What is the eligibility requirement to participate in the Syneos Health 401(k) plan?
Employees of Syneos Health are typically eligible to participate in the 401(k) plan after completing a specified period of service, as outlined in the plan documentation.
How much can I contribute to the Syneos Health 401(k) plan each year?
The contribution limits for the Syneos Health 401(k) plan are in line with IRS regulations, which may change annually. Employees should check the latest guidelines for the current limits.
Can I take a loan from my Syneos Health 401(k) plan?
Yes, Syneos Health allows employees to take loans against their 401(k) balance, subject to certain terms and conditions outlined in the plan.
What investment options are available in the Syneos Health 401(k) plan?
The Syneos Health 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to help employees diversify their portfolios.
How often can I change my investment choices in the Syneos Health 401(k) plan?
Employees can change their investment choices in the Syneos Health 401(k) plan at any time, allowing for flexibility in managing their retirement savings.
What happens to my Syneos Health 401(k) if I leave the company?
If you leave Syneos Health, you have several options for your 401(k) savings, including rolling it over to another retirement account, cashing it out, or leaving it in the Syneos Health plan, depending on the plan’s rules.
Is there a vesting schedule for the Syneos Health 401(k) plan?
Yes, Syneos Health has a vesting schedule for employer contributions, meaning employees must work for the company for a certain period before they fully own the employer-matched funds.