How To Set Up A Section 125 Plan

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How to set up a section 125 plan. A full section 125 cafeteria plan allows for fsa flexible spending accounts and dependent child care to be deducted from payroll on a pre tax basis for eligible out of pocket expenses but also most commonly includes the premium only plan language with the eligible benefit premiums. The employer must do it through a premium only plan pop or cafeteria plan and to set up one of those you need a section 125 plan document. Follow the onscreen setup instructions.

Due to the complexity of these plans and their compliance issues contact a benefits administration professional who specializes in creating and administering these types of plans. Select ez setup next. Tax savings for everyone with a plan document a section 125 premium only plan document allows your employees to voluntarily agree to a salary reduction so that the employer can pay their insurance.

Simple way to obtain favorable tax treatment for benefits already offered. Setting up a section 125 cafeteria plan setting up a section 125 cafeteria plan is straightforward and easy. It can help businesses save money while keeping employees happy.

Select insurance benefits next. A section 125 cafeteria plan offers a cost effective benefits plan for companies. As such it is recommended that businesses work with a qualified plan administrator and certified public accountant cpa so that the most appropriate plan for the business is chosen.

A section 125 plan is called a cafeteria plan. A pop plan is the simplest type of section 125 plan and requires little maintenance once it s been set up through payroll. Select payroll item new.

A section 125 cafeteria plan lets a business owner offer affordable employee benefits while giving themselves a payroll tax break. Section 125 is officially an irs pretax vehicle nicknamed cafeteria plan because employees can choose pretax benefits like medical or dental insurance or opt to receive the equivalent amount on their paycheck paying taxes on. To set up a cafeteria plan employee and or company payroll item with ez setup.