The Ultimate Guide to Section 125 Plans

What is a Section 125 Plan?

The Section 125 Plan is a powerful tool for employees to save money on taxes. By allowing employees to make pre-tax contributions toward things like healthcare premiums, childcare costs, and even transportation, it reduces your taxable income and increases your take-home pay.

Section 125 Plans: What You Need to Know!

How Does a Section 125 Plan Work?

A Section 125 plan lets you allocate a portion of your paycheck to cover eligible benefits before taxes are deducted. This lowers your taxable income, which means you pay less in taxes. The money you put into the plan is spent on things like healthcare or dependent care, and the best part is, it’s all tax-free!

What Are the Advantages of Section 125 Plans?

• Lower Taxes: You pay fewer taxes because you’re contributing pre-tax dollars to eligible benefits.
• Pre-tax Contributions: Contribute to benefits like healthcare premiums, FSAs, and dependent care.
• More Benefits, Less Tax: Get more benefits for less money — it’s a win-win!

Is a Section 125 Plan Right for You?

If you’re looking to reduce your taxable income and maximize your benefits, a Section 125 plan is a great option. It helps you keep more of your paycheck, offering tax savings and increased financial flexibility.