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The Complete Idiot's Guide® To Accounting by Lita Epstein, Shellie L. Moore

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Exploring Tax-Exempt Benefits

Many of the benefits you offer your employees are exempt from taxation for the employee and offer your business a tax deduction to reduce the business’s tax bill. Health insurance, life insurance, and qualified retirement plans are the most common examples of these benefits. Yet many business owners do not know about the many other benefits that are exempt or taxable.
With tax-exempt benefits, you don’t need to add the amount you pay as the employer toward these benefits. Also, any insurance premium or retirement contribution paid by the employee is subtracted from his or her pay before you calculate income taxes. As needed, we indicate in this section which benefits are only excluded from federal taxes and which ...

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