Tax Deduction Consulting: Qualified Pre Tax Deduction Wilmington DE
Diversified Financial Consultants
Years of Experience: 34
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Title: Certified Financial Planner"
Company: Morgan Stanley Smith Barney
Years Experience: 8
Captive Insurance,Life Settlements,Pension for Highly Compensated Owners,Stock Market Alternative,Wealth Management,Health Care Insurance,Retirement Planning,Real Estate Investment Planning,Commission-Only Financial Planning (Full Disclosure),Insurance & Risk Management Planning,Retirement Income Distribution Planning,Education Funding & Financial Aid Planning,Hourly Financial Planning Engagements,Fee Only Portfolio Management,Wealth Engineering,Mortgage Refinancing,IRA, 401k, Roth IRA, QDRO Rol
Company: Curry Poole Group, LLC
Investment Advisor Rep: Yes
Registered Investor: Yes
Years Experience: 42
Pension for Highly Compensated Owners,Stock Market Alternative,Reverse Mortgage,Medicare Planning,Annuities,Alternative Asset Class Planning,Investment Consulting & Allocation Design,Insurance & Risk Management Planning,Retirement Income Distribution Planning,Education Funding & Financial Aid Planning,Hourly Financial Planning Engagements,Portfolio Engineering,Mortgage Refinancing,IRA, 401k, Roth IRA, QDRO Rollovers,CD Alternative,Alternative Investments,Life Insurance,Investment & Portfolio Man
New Castle, DE
Life Strategies, LLC
Years of Experience: 8
IARFC, FPA, SFSP
Invoice, Estate Planning, Retirement Planning, Tax Planning, Charitable Planning, Asset Protection, Compensation Plans
Tax Deduction Consulting: Qualified Pre Tax Deduction
Qualified Pre Tax Deduction
A qualified pre tax deduction is taken from your income before the tax is levied on it. It therefore never appears on your employer's quarterly reporting form 941 or your form W-2.
A qualified pre tax deduction is a term used to describe a deduction from your income that is taken before your taxable income is computed for the purpose of determining tax liability. It does not appear on your employer's quarter report, form 941, to the IRS and it does not appear on your form W-2. This means that it reduces your federal tax, state tax, and even FICA tax by reducing the taxable income.
One common form of qualified pre tax deduction is used for parking expenses for employees. This type of deduction is done in three different ways. They are employer paid pre tax deduction, employee paid pre tax deduction, or a combination of both. In the employer paid method, the employer pays the employee a set sum of money. This money can be used for parking expenses, transit expenses, or vanpool expenses. The sum may be up to $100 per month.
Some of the qualified pre tax deductions plans work by a combination of employee contributions and employer contributions. The University of Chicago offers a voucher plan where the employee elects to have a certain amount deducted on a pre tax basis from their pay and this amount is placed in a transit fund. The transit fund issues vouchers to the employees that can be used to pay for public transportation. The limit of contributions to the plan is $65 per month for each employee.
Another example of a qualified pre tax payroll deduction is the contribution to a personal 401(k) plan. The yearly limit on such contributions have has been set at $15,500 for the tax years of 2007 and 2008. Individual employers, who administer the plans, might set a lower limit for their employees. If they do, the employer's limits are in force for the plan. Regardless, the amount contributed to the plan is deducted from income be...