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The Smart Approach to Pre-Tax Benefits

Looking to boost your benefits program without added cost? Section 125 Cafeteria Plans allow employees to pay for medical and childcare expenses using pre-tax dollars. Health Sphere helps you set up and run these plans effortlessly. Itu2019s a cost-effective solution that improves satisfaction and cuts tax costs. Learn more at our website! https://tryhealthsphere.com/understanding-irs-section-125-cafeteria-plan-qualifying-events/<br><br><br><br><br>

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The Smart Approach to Pre-Tax Benefits

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  1. Health Sphere Presents: Section 125 Cafeteria Plan Overview This presentation provides a comprehensive overview of Section 125 Cafeteria Plans, highlighting their tax advantages for bothemployees and employers. We will cover key benefits, compliance essentials, and the types of plans offered by Health Sphere.

  2. What is a Section 125 Cafeteria Plan? TaxAvoidance Prevents constructive receipt of taxable income under IRC §125, allowing pre-tax treatment of benefit elections. Employer-Sponsored A written planofferingemployees a choice between taxable cash and qualified pre-tax benefits. Employee Eligibility Applies exclusively tocommon law employees on U.S. payroll, ensuring broad applicability.

  3. Key Benefits of Section 125 Plans TaxSavingsforEmployees for qualified benefits with pre-tax dollars. FICATax Reductions (Social Security and Medicare contributions). Employees reduce their taxable income by paying Bothemployers and employees save on FICA taxes Increased Take-Home Pay employer's overall tax liability. Comprehensive Coverage FSAs, and life/disability insurance. Boosts employee net pay while reducing the Coversvariousbenefits likehealth, dental, vision,

  4. Compliance Essentials for Employers Mustadopt awritten plan document eligible administrative rules. Employee elections are generally irrevocable for the plan year unless a specific qualifying event occurs. Plans must pass non discrimination tests to ensure benefits do not favor highly compensated employees. Strict adherence to IRS regulations is crucial to avoid the loss of tax-favored status for the plan. detailing benefits all and

  5. Types of Section 125 Plans Offered by Health Sphere Flexible Spending Accounts (FSAs) Enables pre-tax savingsfor eligible healthcare and dependent care expenses. Premium Only Plan (POP) insurance premiums on a pre-tax basis. Full Cafeteria Plan Combines employercontributions with employee pre-tax elections for a broader range of benefits. Allows employees to pay for health

  6. Common Use Cases and Examples Section125plansoffertangiblesavingsthroughvariousapplications,benefitingboth employees and employers. 25-30% FICA HSA DCAP Employer saves matching FICA taxes on all employee pre-tax contributions. Health FSA allows reimbursement for eligible medical expenses tax-free. Dependent Care Assistance Program covers childcare costs with pre-tax dollars. Average tax savings for employees paying health premiums pre-tax ($150/month example).

  7. Contact Health Sphere for Your Section 125 Plan Needs Email: Contact@tryhealthsphere.com Phone: 929-305-1925 Website: www.tryhealthsphere.com Schedule a free consultation to optimize your benefits program and maximize tax savings for your organization.

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