How can you help your employees prepare for tax season?

Tax season is right around the corner. Unfortunately, many of your employees aren’t familiar with the effect tax withholdings have on their income, paycheck or tax returns. While filing taxes as a W-2 employee may seem straightforward to some, it can be a daunting task if you aren’t familiar with the process. Each of your employees has nuances to their financial situation, some of which they may not be aware.

Providing your employees with tax filing tips and guidance to ensure they are filing their information accurately and appropriately, while maximizing the amount of their hard-earned money they retain would be a valuable benefit to offer, right?

Related: Tax season is coming — and it might be as chaotic as last year

Typically, this type of guidance is only provided by professional tax experts, financial advisors or financial counselors. Unfortunately, many employees are not in a financial position to afford this support. Without guidance, employees feel confused and overwhelmed with their situation and fearful that they may make a costly mistake. As an employer, you are in a unique position to support your employees during tax season. There are several, simple ways you can offer valuable services to help your employees successfully navigate tax season.

1. Your HR department may be able to offer educational support and materials, helping employees understand the various forms and their designations. Having an open door and willingness to explain the basics is a great start, and your employees will appreciate the opportunity to ask questions.
2. Offer to review your employees’ W-4 forms with them to see if the withholding amount makes sense for the employee. You may be able to make simple suggestions they hadn’t thought of.
3. Sponsor a tax preparation seminar. Through your HR department or even through the CEO/President if your organization is smaller, invite a local CPA firm to talk about the nuances of tax filing and answer questions. This could be onsite or through a virtual webinar, depending on the structure of your organization.
4. Send company reminders for filing deadlines. Otherwise, employees may forget to complete this seemingly simple task. Reassure them that although the filing process may seem overwhelming and complicated, there are plenty of resources available to help them.
5. Share resources to help them. Free online tax withholding calculators are available that can quickly provide your employees with a visual of how their withholdings will affect their income. By entering a few basic pieces of information online, they’ll be able to determine whether to adjust their withholdings.
6. Offer a holistic financial wellness program. Many financial wellness services include online budget calculators, as well as educational resources, courses and checklists to further your employees’ knowledge and understanding of tax season requirements. A comprehensive solution will also include financial coaching, where your employees can receive one-on-one guidance and recommendations from a certified counselor. Unbiased, expert advice can be invaluable to your employees, and it alleviates your HR department from making decisions for your employees.

The impact of financial wellness benefits extends far beyond tax season. Once the taxes are (appropriately) filed, your employees may receive money back. With a financial wellness program in place, your employees can seek guidance on how to invest those returns to maximize their value. Should they put the money directly in a savings or investment account? Should they take a percentage of the return and pay down debt?

If they have access to a personal financial assessment, they may have already answered some of these questions and identified goals. Others might have no idea how to maximize the value of their return and would benefit from access to a personalized financial dashboard that shows them how various payments will affect their savings, credit and retirement accounts. Maybe a simple online budget calculator is enough to help others determine how to disperse the funds.

No matter the financial position your employees find themselves in come April 16, 2020 (and beyond!), a holistic financial wellness program can provide every employee with unique, personalized recommendations and tools to help them make the best financial decisions for their personal situation.

David Kilby is president and founder of FinFit.

READ MORE:

• Everything you need to know about the new IRS employer tax credit
• Recordkeepers ‘deluged’ by sponsor questions need answers on SECURE Act
• 401(k), IRA, pension contribution limits for 2020: IRS