Save on taxes

According to Ben Franklin, “In this world, nothing is certain but death and taxes.” Too bad Ben didn’t have access to the financial planning resources available today. He would have known that there are a number of things you can do to keep more of your money out of Uncle Sam’s hands and in your own.

• Hewlett Packard Enterprise 401(k) Plan – When you participate in the Hewlett Packard Enterprise 401(k) Plan, you’ll reduce your taxable income today if you make pre-tax 401(k) contributions and in retirement if you make Roth 401(k) contributions or after-tax contributions. You also have the opportunity to convert after-tax contributions to Roth to build potentially more tax-free income. Plus, you’ll pay no taxes on any company match received on pre-tax and Roth contributions until you take the money out of the Plan (matching contributions are not made on after-tax contributions). And, any possible investment income grows tax deferred. To learn more about the plan's new contributions types and how they are taxed, go here.
• Hewlett Packard Enterprise Health Savings Account (HSA) – Use the HSA to pay for deductibles and coinsurance for medical care and prescription drugs, dental and vision care, Medicare premiums (if you are at least age 65), and your premiums for COBRA and Long-Term Care insurance if you leave HPE. An HSA always belongs to you, even if you change medical plans, change jobs, or retire. Learn more.
• Hewlett Packard Enterprise Health Care Flexible Spending Account (FSA) – Use the Health Care FSA to pay for eligible annual out-of-pocket health care expenses, including copays and coinsurance for prescription drugs, doctors visits, and more, with dollars that are never taxed. Your contributions come out of your pay before taxes are calculated, which lowers your taxable income—and the federal income tax you pay. If you want to enroll in the FSA, be sure to estimate your expenses carefully before you enroll, because account balances don’t roll over from year to year. In other words, “use it or lose it”—the IRS requires that you forfeit any money not reimbursed for eligible calendar year expenses. You can contribute up to $3,400 per year in the Health Care FSA. Learn more.
• Hewlett Packard Enterprise Dependent Care Flexible Spending Account (DCFSA) – Use the Dependent Care FSA to save for eligible out-of-pocket dependent care expenses, including babysitters, day care, nursery schools, after school programs, etc. Eligible expenses also include senior programs for your dependent parents who live with you and are claimed as a dependent on your federal tax return. As with the Health Care FSA, the money you contribute is never taxed, as long as you use the money in your account to pay for eligible expenses incurred during the calendar year. Learn more.
• Individual Retirement Accounts (IRAs) – If you contribute the annual maximum to the Hewlett Packard Enterprise 401(k) Plan, including after-tax contributions, you also may want to consider contributing to a traditional pre-tax IRA or Roth IRA. A traditional IRA offers tax-deferred growth and, for some investors, contributions (but not earnings) to a traditional IRA will also be tax-deductible. Qualified distributions of both contributions and earnings from a Roth IRA are federal income tax-free. Both types of IRA are available through a variety of financial institutions and offer tax savings for today and tomorrow.
• 529 Savings Accounts – Available in most states, these accounts enable you to set aside money each year to pay for the future education of your children or certain other family members. The money in your account grows tax free over time. Earnings are never taxed, as long as you use the money in your account for eligible education expenses, such as tuition, books, room and board, etc.

For more information about what you can do to lower your current and future taxes—including trust funds, tax shelters, and estate planning—consult a professional financial advisor.

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