Taxing time: 4 ways employers can support employees throughout tax season

Tax season can be a complex time for many of us, including your employees. Fortunately, there are many ways companies can leverage their financial workplace benefits to help employees lessen the burden and stress that comes with tax planning—and you can add value without having to venture into the business of tax advice.

With tax deadlines right around the corner, there are still some levers employers can pull to help top talent navigate their taxes this year and help them set themselves up to make more informed decisions through the lens of their workplace benefits moving forward. Consider these four key areas as opportunities to remove pain points and contribute to a smoother tax season for your top talent.

No. 1: Tidy the paperwork trail

If nothing else, employees expect their employers to help with one of tax season’s most important fundamentals: Gathering paperwork. From income statements like W-2s and I9s to proof of health insurance or health savings accounts (HSAs) and retirement account statements, your employees expect a straightforward experience finding what they need when they need it.

So, consider how smoothly your current system of delivery and communication around tax documents is working. Do your employees have questions, feedback, pain points? Is there room to streamline and automate? Look for areas your benefits providers may be able to help you upgrade the participant user experience on your benefits platforms, call centers, support chats, and more. For example, does your benefits platform have a dedicated tax center that centralizes all needed documents, FAQs, contact information, and relevant participant education resources?

No. 2: Educate on tax considerations

Beyond being able to track down and access important paperwork, your employees may also appreciate help interpreting what it all means and how it relates to their overall financial picture. A robust workplace benefits participant education program should also consider touching on tax-related topics, including overviews of popular tax management and investment strategies that employees may want to consider for their own financial needs. There is a difference between offering tax advice and providing key information and context for your equity participants to educate themselves and dive deeper on financial literacy topics that relate to tax.

Some examples to consider highlighting for employees include the basic mechanics of tax-loss harvesting, donating appreciated assets, timing the exercise of stock options, or basic investing topics like capital gains and losses, wash sales, and more. Work with your benefits providers to highlight timely tax-related themes and add value by helping employees find the information and professional support they need to navigate federal, state, and local tax requirements.

Also consider flagging important dates and benefits features that may help employees plan. For example, employees enrolled in a qualifying high-deductible health plan (HDHP) may be able to make tax-deductible contributions to an HSA, depending on your company’s policies. Some workplace financial benefits are especially complex when it comes to taxes: Equity compensation, HSAs, and retirement distributions are all subject to rules and regulations that may vary by locale and situation. Encourage employees to connect with a tax advisor for information about their individual circumstances.

No. 3: Give opportunities to give back

Many of your employees may not realize that giving back can play a part in their financial strategy—and that their workplace benefits may be a place where they can do it. If your company offers equity compensation, charitable giving benefits like a donor-advised fund (DAF), or education savings plans like a 529 account, make sure to supplement these benefits with on-demand educational content explaining how it works and flagging the possible tax repercussions.

Some workplace benefits can potentially be used to help employees donate existing assets to causes and people that matter to them. For example, benefits focused on charitable giving are growing in popularity, with some employers offering potentially tax-advantageous options like a donor-advised fund (DAF). Charitable giving benefits like these combined with access to financial guidance offer employees greater support in making appropriate decisions about the timing of their donations for tax purposes, or determining which assets they want to donate. If this is something you offer your employees, don’t be shy about providing information to help them understand how to use it.

No. 4: Point to financial and tax professionals

Tax season often raises opportunities for us to reexamine our financial lives and look for areas of improvement. Another way companies can support their employees throughout tax season is by recognizing how complex it can be—and helping them connect with professionals who are specifically trained to help handle their tax compliance.

Related: Tax season: Important HSA considerations the workforce should know

Even your most sophisticated leaders may appreciate access to professional support in aligning their workplace accounts to their investment strategy. As a part of a comprehensive benefits suite, many businesses now offer their employees access to financial professionals like financial advisors and coaches who can help point them to additional information or tax experts qualified to answer their tax questions.

Consider how these or any other adjustments in your benefits offering can help your employees connect their workplace benefits more strategically with the rest of their financial lives. Helping your employees make the most of their workplace benefits accounts, in tax season and beyond, can have a real impact today and tomorrow.

Kate Winget is Chief Revenue Officer at Morgan Stanley at Work.