Promoting financial wellness for employees is something that all employers should be cognizant of throughout the year. A financial wellness initiative should feature advice with regards to creating a budget, managing debt, and building savings. Employers could also promote financial well-being by assisting employees with tax help. Here are some ways that an employer may help employees with their tax preparation and filing:
- Make employees aware of tax-advantage benefits to include: retirement plans, flexible spending accounts (FSAs), health savings accounts (HSAs), and commuter perks. In many cases, these benefits may help an employee decrease their taxable income.
- Enlist an outside expert to provide lunch and learn sessions for your employees. Buy lunch and invite employees to learn the basics of tax planning and what is needed for the tax preparation and filing process.
- Employers may also consider connecting lower-income wage earners to specialized tax accountants who understand tax credits and other support available to lower income individuals. There are a number of tax credits available to marginalized groups, including credits specifically for employees who are disabled, low or moderate income wage earners, and those who are providing care for a child or dependent. Educating employees on the most common types of tax credits may help reduce their overall tax liability.
- Update employees through newsletters, eblasts, posters, signs, etc. on tax deadlines, required documents, common tax terms, common deductions and credits, and on tax code changes. Sending messages in a variety of modes will reach most employees and shows that the organization cares about them through this stressful time of year.
- Offer free technology tools such as TaxSlayer, TurboTax Free Edition, FreeTaxUSA, and TaxAct, to name a few, in order to ease an employees’ tax-filing burden. These are user-friendly software products that include step-by-step guidance that make the process of tax filing much more manageable for employees. Along with free file services, many employees may be eligible for free tax help from trained volunteers at community sites around the country. The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who make $60,000 or less, persons with disabilities, the elderly, and those who have limited English speaking skills who need assistance in preparing their own tax returns. IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individuals. Employees or employers may visit the Internal Revenue website at https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers to learn more about VITA.
- Employers who sponsor workers from other countries may help by offering to cover the cost of tax filing for the employee’s first two-years of employment, as a limited number of tax accountants hold international tax experience and those who do specialize in this area are often very expensive.
Employers who engage employees early and provide not only tax preparation and filing assistance, but who also provide a broader financial wellness initiative will be rewarded with employees who are not only financially stable, but who are also more productive, have less absenteeism, and who have an overall increased loyalty towards their employer. All traits that most employers would be proud to have within their workforce.
For additional information on this topic, please contact us at www.newfocushr.com.
Written by: Kristen Deutsch, M.B.A., CCP
President
3/11/2024
