Occidental Petroleum Employees: Year-End Idea #5: Charitable Giving

As Occidental Petroleum employees prepare to give at the end of the year, they should 'plan ahead to maximize the impact of your donations,' says Michael Corgiat of The Retirement Group at Wealth Enhancement Group. Knowing how to maximize tax benefits and timing your giving can help you maximize your giving to charities.

The Retirement Group, a division of Wealth Enhancement Group, recommends that Occidental Petroleum employees and retirees incorporate charitable giving into overall financial planning to help them meet their long-term financial goals. This approach supports worthy causes while optimizing possible tax advantages of such generosity.

In this article, we will discuss:

1. We pause to give thanks for our bounties and the people in our lives as the holiday season and the end of the year approach.
2.This also is a time when charities are often thought of. These tax benefits may make you want to donate more.
3. We recommend all able-bodied Occidental Petroleum employees and retirees do this in their year-end tax planning.

A new study from Fidelity Charitable found that 60% of people over age 65 said they will give to charity in retirement, on average giving away USD 6,500 a year. That would suggest that charitable giving may be an important consideration for people approaching retirement age and could be a meaningful way to give back to causes they care about.

No tax deduction for charitable gifts.

Donations generally are deductible if you itemize deductions on your federal income tax return. This may help you increase your donation as well.

Example(s): Assume you want to make USD 1,000 in charitable donations. A possible way to potentially increase the value of the gift is to add the amount of any income taxes saved through the charitable deduction. You might give USD 1,316 to charity at a 24% tax rate [USD 1,000 (1 - 24%) = USD 1,316]. [USD 1,316 x 24% = USD 316 in tax savings]. Alternatively, you could donate USD 1,471 at a 32% tax rate to charity [USD 1,000 (1 - 32%) = USD 1,471; USD 1,471 x 32% = USD 471 in taxes saved].

Yet Occidental Petroleum employees and retirees should be aware that their deduction may be limited to a certain percentage of AGI. You can, for example, deduct 60% of your AGI for the year on cash gifts to public charities versus 30% or 20% for other gifts to charity. Generally speaking, charitable deductions in excess of the AGI limitations can be carried forward and deducted over the following five years subject to income percentage limitations for those years.

For 2022 charitable donations, the normal rules apply: Direct cash donations to public charities may not exceed 60% AGI. You can take a USD 400 charitable deduction for direct cash donations to public charities from 2021 even if you do not itemize deductions.

Document your charitable donation properly. Any contribution of cash, a check, or other monetary gifts that you make must be recorded as either a bank record (such as a canceled check, a bank or credit union statement, or a credit card statement) or a written communication (such as a receipt or letter) from the charity giving its name, date, and amount. Any deduction you claim for a USD 250 or more charitable contribution must be accompanied by a contemporaneous written acknowledgment from the charity. You face additional requirements if you make non-cash contributions.

Year-end tax planning Employees and retirees of Occidental Petroleum should plan for such charitable contributions when making year-end tax contributions. The timetable of your income and expenses usually has some bearing on you. Generally speaking, you should time recognition of your income so it is taxed at the lowest rate and recognition of your deductible expenses so they can be claimed in years when you are in the higher tax bracket.

If you expect to be in a higher tax bracket the following year, for example, delay making the charitable contribution until January so you can claim the deduction the following year when you will be able to take the larger tax benefit. Or you could roll the charitable contribution and other deductions over to a year where your itemized deductions are greater than the standard deduction. And if those income percentage limits apply to you in a given year, you may wish to move income into that year or move deductions out of that year to allow a larger charitable deduction for that year. A tax expert can evaluate your individual tax situation.

A word of caution For employees and retirees of Occidental Petroleum, stick with reputable charities and avoid ones with similar names. Fraudsters often imitate charities on phony websites, emails, phone calls, social media, and in person solicitations. Search for the charity through the Tax-Exempt Organization Search tool at irs.gov. Don't send cash; instead, use a check or credit card.

It's like planting a tree with charitable giving. As a tree grows over time, so can your charitable donations. Benefits from charitable giving can be seen immediately in the recipient organization as well as in the long-term benefits of continued support. As a tree provides shade, clean air, and space for wildlife, charitable giving may help those in need as well as the community in general. Like a tree, your charitable contributions can also flourish long after you make them - and provide a legacy for future generations.

Added Fact:

The research shows that charitable giving benefits both the recipients and the donors as well—especially in their 60s. A study in Psychology and Aging in November 2022 reported lower stress, higher life satisfaction, and better health among older adults who regularly gave. Giving back and making a difference in others' lives can provide meaning and fulfillment in retirement.

Added Analogy:

Charitable giving is like planting bulbs in the fall in a garden. Occidental Petroleum workers are like gardeners who have harvested plenty during their careers. Like these experienced gardeners who choose and plant bulbs which will bloom in the spring, retirees can choose charities and organizations to support. With every charitable donation comes hope in initiatives and programs that will change things for the better. Just as the gardener's work produces flowers, retirees' charitable gifts make an impact on others and last a lifetime. Remember that like a well-tended garden, charitable giving takes planning, tending, and joy in seeing the results grow.

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Sources:

'Tax Wise Charitable Gifting Tips and Secure Act 2023 Updates.' Jewish Foundation , 2023, www.pajewishendowment.org .
'Tax-time Charitable Giving Questions.' Rose Community Foundation , 2023, www.rcfdenver.org .
Accounting Insights Team. 'Maximizing Tax Benefits Through Strategic Charitable Giving.' Accounting Insights , 11 Jan. 2025, www.accountinginsights.org .
'7 Tax-Smart Charitable Giving Tips Before 2023 Ends.' San Diego Foundation , www.sdfoundation.org .
'Tax-time Charitable Giving Questions.' Rose Community Foundation , 2023, www.rcfdenver.org .

What are the key provisions of the Occidental Petroleum Corporation Retirement Plan that employees should understand to maximize their benefits, and how does the company structure its contributions relative to employees' earnings? As employees of Occidental Petroleum Corporation consider their retirement planning, it's vital to grasp how the company's contributions function, particularly concerning the wage base and annual earnings limits.

Key Provisions of the Occidental Petroleum Corporation Retirement Plan: The Occidental Petroleum Corporation Retirement Plan is fully funded by the company, with contributions based on an employee's annual earnings. The company contributes 7% of annual earnings up to the Social Security wage base ($137,700 in 2020) and 12% on earnings above the wage base. This structure is designed to help employees build substantial retirement savings. The plan's benefit limits align with IRS regulations, and employees should be aware of how these contributions are applied based on annual earnings limits to maximize their benefits(Occidental_Petroleum_Co…).

How can Occidental Petroleum Corporation employees manage their investment options within the Retirement Plan, and what resources does the company provide to help them make informed decisions? The investment options available through the Occidental Petroleum Corporation Retirement Plan serve as a significant tool for employees wishing to tailor their retirement savings according to their financial goals and risk tolerance. Understanding these options can be complex and requires an in-depth exploration of available funds, associated risks, and projected performance.

Managing Investment Options: Occidental Petroleum employees have control over how contributions to their Retirement Plan are invested. The plan offers various investment funds, including bond and stock market index funds, and target date funds. Employees can manage their investment elections through the online platform, oxy.voya.com, which also provides fund performance data and advice resources, such as Online Advice and Professional Management services, to assist employees in making informed decisions(Occidental_Petroleum_Co…).

In what ways do vesting schedules impact employees' retirement benefits at Occidental Petroleum Corporation, and what rights do employees have under the Employee Retirement Income Security Act (ERISA) regarding these benefits? Navigating the vesting schedule can make a profound difference in the go-forward retirement landscape for employees. Occidental Petroleum Corporation offers a structured approach to vesting, impacting when benefits are owned outright, and understanding the implications of ERISA for retirement planning is essential for all employees.

Impact of Vesting Schedules: Occidental Petroleum's Retirement Plan vests fully after three years of service. Employees are always fully vested in any Rollover accounts. Vesting schedules impact when employees can fully claim their retirement benefits, with protections under ERISA that guarantee the right to earned benefits. Employees who leave before vesting forfeit the nonvested portion of the company’s contributions(Occidental_Petroleum_Co…)(Occidental_Petroleum_Co…).

What are the distribution options available for employees of Occidental Petroleum Corporation when they reach retirement age, and how do these options affect their financial planning? The variety of distribution options at Occidental Petroleum Corporation can create a much more personalized retirement plan, allowing employees to consider how best to receive their benefits while factoring in tax implications and future income needs.

Distribution Options at Retirement: Employees reaching retirement age (60) have multiple distribution options from the Retirement Plan, including lump sum payments and annuity options. These choices impact financial planning, as each option has different tax and income implications, allowing employees to tailor their benefits to their future financial needs(Occidental_Petroleum_Co…)(Occidental_Petroleum_Co…).

How does Occidental Petroleum Corporation support employees who experience disability, and what provisions are in place for continuing retirement contributions during such periods? Understanding the support structure provided by the company, specifically in relation to short-term and long-term disability, is crucial for employees who may find themselves in unexpected circumstances. Itâ€™s important for them to know whether retirement contributions will continue during their disability or if they might need to make adjustments to their financial planning.

Disability and Retirement Contributions: Occidental Petroleum continues to contribute to the Retirement Plan if an employee is receiving short-term disability benefits. The contributions are based on the employee's actual pay during the disability period. This provision ensures that retirement savings can continue during times of temporary disability, supporting long-term financial planning(Occidental_Petroleum_Co…).

How can employees at Occidental Petroleum Corporation ensure their beneficiary designations remain current and what are the implications of these designations for estate planning? The process of maintaining accurate beneficiary designations is critical for the smooth transition of retirement benefits, and employees must be aware of how changes in personal circumstances can impact these designations.

Beneficiary Designations: Employees should regularly update their beneficiary designations to ensure their retirement benefits are directed as desired upon their death. Changes in personal circumstances such as marriage, divorce, or the death of a previously designated beneficiary should prompt an update. Failure to do so may result in unintended allocations(Occidental_Petroleum_Co…)(Occidental_Petroleum_Co…).

What are the specific eligibility requirements for the Occidental Petroleum Corporation Retirement Plan, and how do these requirements differ for various employee categories, such as full-time versus part-time employees? Recognizing the nuances of eligibility criteria within the retirement plan is essential for employees to understand when they can begin to participate and what contributions may apply, especially if they transition between roles.

Eligibility Requirements: Full-time and part-time non-union employees and some union-represented employees are eligible to participate in the plan. Contributions begin automatically on the first day of the month of employment or eligibility. Understanding the specific eligibility requirements, especially for employees transitioning between full-time and part-time roles, ensures accurate participation and benefit accumulation(Occidental_Petroleum_Co…).

How can employees reach out to Occidental Petroleum Corporation for assistance regarding their Retirement Plan benefits, and what are the best practices for ensuring their inquiries are addressed promptly? Effective communication with the company is key during the retirement planning process. Employees should know how to navigate company channels to maximize their understanding of benefits available to them.

Contacting Occidental Petroleum for Assistance: Employees can manage their retirement plan and address inquiries through the Oxy Retirement Service Center and the oxy.voya.com platform. Best practices for ensuring prompt responses include using the appropriate online tools and staying informed about plan updates and changes(Occidental_Petroleum_Co…).

What are the tax implications of distributions from the Occidental Petroleum Corporation Retirement Plan, and how can employees plan accordingly to minimize their tax burden during retirement? Having a comprehensive understanding of how taxes will impact withdrawals is crucial for employees as they strategize their retirement income, and these tax considerations can play a significant role in long-term financial planning.

Tax Implications of Distributions: Distributions from the Occidental Petroleum Retirement Plan are subject to standard federal and state taxes, including required minimum distributions (RMDs) starting at age 72. Employees should consider consulting a tax advisor to minimize tax burdens and maximize retirement income by understanding the specific tax consequences of various distribution options(Occidental_Petroleum_Co…).

How does Occidental Petroleum Corporation's retirement plan structure address the needs of employees transitioning from active service to retirement, particularly in terms of investment performance and management of existing accounts? As employees consider retirement, they should be well-informed about how the company manages contributions already made, ensuring that their investment strategy aligns with their anticipated retirement lifestyle and goals.

Transition from Active Service to Retirement: Occidental Petroleum supports employees transitioning to retirement by continuing contributions and offering a range of investment options that align with long-term financial goals. This structure allows employees to manage their investments effectively during retirement, ensuring that the plan remains aligned with their financial objectives(Occidental_Petroleum_Co…).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Occidental Petroleum offers both a traditional defined benefit pension plan and a defined contribution 401(k) plan. The defined benefit plan includes a cash balance component, where benefits grow based on years of service and compensation, with interest credits added annually. The 401(k) plan features company matching contributions and various investment options, including target-date funds and mutual funds. Occidental Petroleum provides financial planning resources and tools to help employees manage their retirement savings.

Operational Changes: Occidental Petroleum is restructuring its business to focus more on its core oil and gas segments, leading to layoffs affecting around 1,200 employees (Source: Reuters). Strategic Initiatives: The company aims to enhance operational efficiency and reduce costs. Financial Performance: Occidental reported a 15% increase in net sales for Q3 2023, driven by strong demand for its oil and gas products (Source: Occidental Petroleum).

Occidental Petroleum includes RSUs in its compensation packages, vesting over a specific period and converting into shares. Stock options are also provided, enabling employees to buy shares at a predetermined price.