Are you a business owner concerned about taxes and hiring? If so, you are not alone. The July 2018 NFIB quarterly survey of business owners revealed taxes and labor quality are the two biggest issues US firms are facing.
While no one knows for sure what the future holds for the economy, there are tax benefits you can offer your employees to reduce your taxes — and some are not as obvious as health benefits.
A bonus is the tax benefits can make your firm more attractive to potential employees while retaining the staff you have.
If you are looking for a way to lower your tax bill, you should consider these fringe benefits.
1 – Commuter Benefits
Commuter benefits offer employers up to a 7.65 percent reduction in payroll taxes. And if you think you’ll need to do more paperwork, the truth is you won’t. When you work with a firm like ours at Edenred Commuter Benefit Solutions, we take a close attention about the fine print details and make the sign-up process easy.
We’ll help you launch the program, so you get maximum participation and can take advantage of the highest payroll reduction possible. The administration process is seamless, so once it’s running you can focus on the core activities to grow your business.
There are significant benefits for your employees. You’ll find a happier, less-stressed and productive work environment. That’s in part because they’ll be saving up to 40 percent off their commuting costs. The benefit applies to public transit like subways and buses, ridesharing (Uber Pool, Lyft Shared), and also to people who need to park.
We can answer any questions you have or visit our website FAQ.
2 – Employer Educational Assistance
Typically used for MBA students, employers can offer educational tax-free assistance to their employees. The amount of the assistance is capped at $5,250.
It’s an attractive benefit to offer employees who are seeking to improve their skills. The money can generally go toward the cost of books, equipment, fees, supplies, and tuition. While there are a few rules that govern the fringe benefit, in general, the education must relate to your business.
3 – Dependent Care Assistance
If you have employees who need to pay for care for dependents, it’s possible for you to provide the payment through your business and reap the tax benefits.
Employees can elect set aside up to $5,000 for dependent care assistance. The IRS has a pamphlet explaining the regulations governing the program, and you can find it here.
The IRS has other fringe benefit allowances that can also lower your tax bill and help you provide attractive benefits to your employees.
These include everything from different types of insurance to exclusion for having a company gym in your office. So if you are not familiar with fringe benefits that can lower your tax bill, these three are a good place to start your research. Then you can check out the others that may be applicable to your situation.
Do you want to learn more about Commuter Benefits to save in payroll taxes? Download the 101 Guide.