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Zona Rosa’s 2016 Lighting Ceremony

It’s that time of year again; it’s holiday season. Time to start preparing for all of the fun and festive activities all over Kansas City. Zona Rosa is going to kick off their holiday season on Saturday, November 19, 2016, with their annual Northern Lights Holiday Lighting Ceremony.

That also means that tax season is just around the corner and it’s never too soon to start thinking about who you want to do your tax preparation this year. We are located in the Zona Rosa Shopping District, be sure to book your free consultation to see if we can help you out this year!

Help retain employees with tax-free fringe benefits

One way your business can find and keep valuable employees is to offer an attractive compensation package. Fringe benefits are an important incentive — especially those that are tax-free. Here’s a rundown of some common perks and their tax implications.

  • Medical coverage. If you maintain a health care plan for employees, coverage under the plan isn’t taxable to them. Employee contributions are excluded from income if pretax coverage is elected under a cafeteria plan. Otherwise, such amounts are included in their wages, but are deductible on a limited basis as itemized deductions. Employers must meet a number of requirements when providing coverage. For instance, benefits must be provided through a group health plan (fully insured or self-insured).
  • Disability insurance. Your premium payments aren’t included in employees’ income, nor are your contributions to a trust providing disability benefits. Employees’ premium payments (or other contributions to the plan) generally aren’t deductible by them or excludable from their income. However, they can make pretax contributions to a cafeteria plan for disability benefits, which are excludable from their income.
  • Long-term care insurance. Your premium payments aren’t taxable to employees. However, long-term care insurance can’t be provided through a cafeteria plan.
  • Life insurance. Your employees generally can exclude from gross income premiums you pay on up to $50,000 of qualified group term life insurance coverage. Premiums you pay for qualified coverage exceeding $50,000 are taxable to the extent they exceed the employee’s coverage contributions.
  • Dependent care. You can provide employees with tax-free dependent care assistance up to certain limits during the year.
  • Educational assistance. You can help employees on a tax-free basis through educational assistance plans (up to $5,250 per year), job-related educational assistance, and qualified scholarships.

Other tax-free benefits include adoption assistance (up to a certain amount), on-premises athletic facilities and meals provided occasionally to employees who work overtime. Contact us for more information about how to treat fringe benefits for tax purposes.

© 2016