Are you taking full advantage of the tax benefits available through your employer? If not, it definitely pays to educate yourself on what your company has to offer and how much you can save by participating in these tax-wise programs.
- 401(k): If your company offers a 401(k) plan, you can set aside up to $16,500 ($22,000 for taxpayers over 50) in pre-tax savings, plus whatever your company offers in matching contributions.
- Child care: If you pay someone to watch your child while you’re at work, see if your company offers a dependent care program. If so, you could qualify for a child care exclusion of up to $5,000 from your wages or $2,500 if you’re married and filing separately. This is a bigger tax break than the standard child care credit.
- FSA: If you’d like to set aside pre-tax dollars for medical and dental bills, using a flexible spending account is another smart option. By taking money directly from your salary and putting it into an FSA, you won’t have to pay taxes on qualified medical and dental expenses.
- Other programs: Other employee benefit options include education assistance programs, company stock purchases, and tax-free employee exclusions for transit passes, employee parking, group term life insurance, and more.
The savings really add up when you take advantage of ways to set aside pre-tax income through the various programs available as part of your compensation package.
When you’re looking to improve your tax situation, talk to the tax help specialists at Taxation Solutions, Inc. We can help you suss out and maximize the benefits available to you through your employer. Serving the Milwaukee metro, we make your money go further with our no-nonsense tax assistance!