Lyon-Dugin & Associates LLC
401 N 2nd St
Minneapolis, MN 55401
Section 125 Cafeteria Plan saves you 7.35% of every dollar wages
A Section 125 Cafeteria Plan, often referred to as a "Flexible Spending Account", helps employees keep more of their paycheck by reducing federal and state taxes on certain expenses. It allows employees to pay some expenses before taxes are deducted from their paychecks. Ask us how we can help you set up a Section 125 Cafeteria Plan for your company. Payments for expenses through a Section 125 Cafeteria Plan include daycare, insurance premiums, and most out-of-pocket medical costs.
Most employers set the limit for a Section 125 Cafeteria Plan equal to the federal limits, which in 2015 is $6,650 for family and $3,300 for single.
Warning is your Section 105 Plan invalid
Remember S Corp with under 2 EE' are not fined until 2016 ?
Self Insured Medical Reimbursement
It's a new version of a Health Reimbursement Arrangement Plan that saves Employer FICA-Med Taxes
1. Set up a formal Reimbursement Plan (fixed $ amount,
should include owners, must comply with IRS, HIPAA,
COBRA, ERISA, and ACA rules)
2. Help the Employees Purchase a Health Care Plan.
3. Hire a TPA to handle employee reimbursement.
4. Distribute a Summary Plan Description.
5. Renew and review every calendar year.
10 Most Often Missed Tax Saving Deductions
- 56 cents per mile for business miles driven. Doing proper documentation on this can save you more than other nine listed below. Need Who, What, Where and When for every day -not just for business use of the car.
- State/local income taxes plus vehicle registration renewal fees
- Charitable contributions, cash and non-cash donations. Note: MN allows first $500 deduction.
- Job Hunting. Out of Pocket expenses, un-reimbursed employer membership dues, networking meetings
- Student Loan interest up to $2,500 per year
- Education credits, on-line and classroom. Tuition and Professional training qualified as higher education expense (form 8917)
- Moving expenses to a new job location (minimum 75 mile rule) Special Form # 3903. Expenses must be work related.
- Alimony payments and child caregiver expenses. Different than child support, which is court ordered
- Travel expenses for military reservists. Example: active duty military pay
Items listed above require documentation. Bring to your tax preparer.
Health Reimbursement Arrangements
(ACA Did Not Eliminate These)
Employers can make benefit plans a fixed cost by using Health Reimbursement Arrangements (HRAs), which are Internal Revenue Service (IRS) sanctioned programs that allow an employer to set aside funds to reimburse medical expenses paid by participating employees. Using an HRA yields tax advantages to offset health care costs for both employers and employees. HRAs are initiated by the employer and serviced by a third-party administrator or plan service provider. The employer may provide in the HRA plan document a credit balance in an employee's HRA account that can be rolled over from year to year like a savings account. The employer can decide if and how much rolls over, and the amount can either be a percentage or a flat amount. An HRA must be funded solely by an employer, and contributions cannot be paid through a voluntary salary.
Eight Fringe Benefits Excluded from Gross Income
Section 132(a)(1): No Additional-Cost Service
Section 132(a)(2): Qualified Employee Discount
Section 132(a)(3): Working Condition Fringe
Section 132(a)(4): De Minimis Fringe
Section 132(a)(5): Qualified Transportation Fringe
Section 132(a)(6): Qualified Moving Expense Reimbursement
Section 132(a)(7): Qualified Retirement Planning Services
Section 132(a)(8): Qualified Military Base Realignment and Closure Fringe
As a Compliance Advisor and Enrolled Agent listed with the US Treasury, You can imagine the number of Section Codes we deal with as compliance and regulatory control to save employers and employees tax dollars. Is your benefits plan costing you employee turnover- I can help
Guides published on Patient Protection and the Affordable Care Act: