Permalink Submitted by Alan Spross on Wed, 2008-06-04 03:38
Al,
I don’t know about VEBA plans, but the 125 plans are pre tax for both income tax and SS/Medicare. Often there is an accompanying FSA that has the same tax advantages.
With just the basic insurance, you cannot tell just by looking at the employee W-2 whether insurance premiums are pre tax or not. A pay check stub, preferably the year end stub is needed to determine the components of taxable income. Probably there are many taxpayers itemizing premiums in error that were in fact pre tax.
Employees will experience a minor loss of SS retirement benefits if they use these benefits extensively over many years, since health premiums, dental, health FSA and dependent care FSA set asides can add up to some real dollars not subject to SS/Medicare withholding. Of course, the employer saves on their share also.
Permalink Submitted by Al Fry on Tue, 2008-06-03 21:14
Apparently only if they have an IRC Sec 125 plan or VEBA in place?
Permalink Submitted by Al Fry on Wed, 2008-06-04 03:12
The plan our church has provides a prototype IRC Sec. 125 plan, which we will adopt. Al
Permalink Submitted by Alan Spross on Wed, 2008-06-04 03:38
Al,
I don’t know about VEBA plans, but the 125 plans are pre tax for both income tax and SS/Medicare. Often there is an accompanying FSA that has the same tax advantages.
With just the basic insurance, you cannot tell just by looking at the employee W-2 whether insurance premiums are pre tax or not. A pay check stub, preferably the year end stub is needed to determine the components of taxable income. Probably there are many taxpayers itemizing premiums in error that were in fact pre tax.
Employees will experience a minor loss of SS retirement benefits if they use these benefits extensively over many years, since health premiums, dental, health FSA and dependent care FSA set asides can add up to some real dollars not subject to SS/Medicare withholding. Of course, the employer saves on their share also.
Permalink Submitted by Al Fry on Wed, 2008-06-04 03:48
TKU, Alan, as always!