"Tax Benefits You Can't Afford To Ignore!"
You
can reduce your taxable income and avoid paying Social
Security and Medicare Tax (7.65%) and Federal Income Tax (15% to 40%)
by enrolling in your company sponsored Flexible Benefits Plan. These
tax savings can apply to one or more of the following options:
- Premium Conversion Account allows for YOUR SHARE
of qualifying group insurance premiums to automatically be deducted
from your pay with TAX-FREE dollars.
- Health Care Flexible Spending Account allows
you to pay for health care expenses for yourself and your family
which are not covered by health insurance including dental, vision,
orthodontia, etc. (and even those deductibles or "co-pays" which
are the patient's responsibility) with TAX-FREE dollars.
- Dependent Care Flexible Spending Account allows
you to pay for child day care or dependent care expenses up to $5,000
per year TAX-FREE.
How you save taxes...
When you participate in a flexible spending account via salary reduction,
you reduce your federal, FICA, Social Security, Medicare (and in some
cases, state) taxes and increase your take-home pay. The money
that is deposited into your Flexible Spending Account comes straight
out of your gross pay, therefore avoiding taxes.
The following example shows how a single person making $30,000 per
year can save $1,824 in taxes annually by contributing $550 per month
to a spending account.
|
Tax Savings Illustration
|
| |
Without
Flexible Benefits Plan
|
With
Flexible Benefits Plan
|
| Gross Monthly Salary |
$2,500.00
|
|
$2,500.00
|
|
|
Qualifying Insurance Premiums |
$0.00
|
|
$100.00
|
|
|
Qualifying Health Care Expenses |
$0.00
|
|
$100.00
|
|
|
Qualifying Dependent Care Expenses |
$0.00
|
|
$350.00
|
|
| Total Qualifying Expense |
$0.00
|
|
$550.00
|
|
| Gross Taxable Income |
$2,500
|
|
$1,950.00
|
|
| Income Tax @ 20% plus F.I.C.A.
@ 7.65% |
$691.25
|
|
$539.18
|
|
| Net Spendable Income |
$1,808.75
|
|
$1,410.82
|
|
|
Post-tax Insurance Premiums |
$100.00
|
|
$0.00
|
|
|
Post-tax Health Care Expenses |
$100.00
|
|
$0.00
|
|
|
Post-tax Dependent Care Expenses |
$350.00
|
|
$0.00
|
|
| Total Post-tax Expenses |
$550.00
|
|
$0.00
|
|
| Net Spendable Income |
$1,258.75
|
|
$1,410.82
|
|
| Increase in Monthly Spendable
Income |
N/A
|
|
$152.05
|
|
| Increase in Annual Spendable Income |
N/A
|
|
$1,824.60
|
|
As you can see, with only $550 in monthly qualified expenses, by enrolling
in the Plan, you would have an extra $152.05/month ($1,824.60/year)
of spendable income, the amount you would otherwise be paying in taxes.
Try our FSA Calculator
to determine your actual savings!
Contact us today to learn how we
can help you!
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