When it comes to employee benefit program, pre-tax deduction is a great plan. However, it is something that many employees often avoid to pay attention! And here comes the importance of the professional financial companies that provide expertise services to make your future more protected.

What do you mean by pre-tax deduction?

A pre tax premium deduction implies the withdrawal of money from an employee’s paycheck to cover several benefits like health, tax etc. It is mainly counted with the gross salary of an employee.

What is the difference between pre-tax and after-tax deduction?

One of the notable differences between these two types of taxes are that while the pre-tax premium deductionis withdrawn from the gross pay before paying the tax, the after tax are cut after the taxes are paid. This kind of tax lowers the burden of the payable tax not only for the employees but also for the employers. One of the greatest examples of these kinds of tax benefit plans are the Federal Unemployment Tax (FUCA), State Unemployment Insurance (SUI) and FICA.

What are some of the pre-tax deduction plans?

Though there are a number of pre tax plans, the following are some popular ones you must know:

• Health Insurance
• Health insurance is the most prominent plan that is sponsored by the employer. Such plans include Flexible Spending Accounts (FSA), Health Saving Accounts (HSA) etc.
• Life Insurance
• Well, if you want to make a beautiful future for your family, there is no better option than life insurance. Future is unforeseen and nobody knows what happens next. Therefore, it is critical to strengthen the future with financial support as much as possible.
• Retirement plans
• Retirement schemes are one of the significant pre-tax premium deductions that protect your post service life. It is something that makes your future more stable even if you don’t have any job. 401(k) / 403(b) and Profit-Sharing plans are a few popular schemes under this plan.

Why should you take such plan?

There are many advantages that you should pick this taxation plan up that are discussed right below:

1. Employee tax saving

The reason why people enroll for the pre-tax schemes more nowadays is its tax saving capacity. Yes! You have read it right! As a certain amount of money is already deducted from the gross salary, the amount of payable tax automatically falls.

2. Reduction of Medicare tax liability

It may sound surprising but it is true that the pre-tax plans help employee to save their income from paying federal, social security and Medicare taxes.

What to look for while hiring a professional financial company for the tax premium plans?

You will get a plethora of service providers when it comes to choose a professional financial company. However, it is never an easy one as you have to pick the one who could align with the strategic goals of your organizations. Therefore, identify the one who could provide you with the most suitable plans without compromising the profitability of your company. Also, check if the professionals are well versed with the modern technology.

Summing Up

If you want to uphold the interest of your company with the best possible employee benefit plans with an appropriate pre tax premium deduction plan, contact Davidow Financial & Insurance Services, INC. It is one of the leading companies where you will get the best professionals for your taxation plans. Get in touch with them at dfinsurance.com for further details!