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Small business owner here, question about setting up a cafeteria plan for myself
Posted on 3/7/14 at 12:37 pm
Posted on 3/7/14 at 12:37 pm
I pay myself a salary, but would like to set up a cafeteria plan that my company would contribute to. Basically it would be the exact amount to cover my health insurance premium. In this example, let's say the premium is $850 a month. If I were to set up a voluntary contribution from the company to myself for that exact amount, would I have to pay income taxes at the end of the year on that? I do my business and personal taxes separate bc it's a C-corp. I'm the only employee fwiw.
1
Posted on 3/7/14 at 1:14 pm to BullredsRus
Potenially a SEP.
You should speak with an advisor though. There are implications for each type of account that you will want to know down the road.
For example, if you establish a SEP, you can contribute but if you bring more employees on board, then manditory contributions to their accounts may occur. Again, speak with an advisor.
You should speak with an advisor though. There are implications for each type of account that you will want to know down the road.
For example, if you establish a SEP, you can contribute but if you bring more employees on board, then manditory contributions to their accounts may occur. Again, speak with an advisor.
Posted on 3/7/14 at 1:20 pm to Cmlsu5618
I spoke with my CPA and he told me that in order to write off my health insurance premiums I'd have to run it through a section 125, or cafeteria plan. So according to my payroll customer service person I can set up that section 125 plan as a deduction from my salary (pretax), or as a contribution from my company to me. I think it would be easier to just do the contribution. But if it shows up on my W-2 as income and I have to pay extra taxes on it at year end (on my personal tax return) then I'm not sure that's the best way to do it.
This post was edited on 3/7/14 at 1:22 pm
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