Take Advantage of Tax-Friendly Options During Benefit Enrollment
The world of tax law is complicated for many, whether someone is a newly-divorced parent of four, a private business owner, or the CEO of a billion-dollar company. Tax laws vary from person to person, business to business, state to state. It isn’t surprising, therefore, when individuals or business entities make tax mistakes and face the IRS for those errors.
Often, it can feel like the tax laws are set up to allow people to fail — and when those failures do occur, that is when to get a tax lawyer on your side to clarify and resolve matters before they get worse. There are certain tax options that are simply laid-out to help individuals and their families, and when simple tax advantages are presented, it could be silly not to opt into those perks.
At about this time every year, employees in Sacramento and across the country are expected to enroll in their employment benefits. These benefits often include healthcare benefits, dental benefits, retirement benefits and more. It is within the “more” category that Forbes reports many men and women make tax-related slip-ups.
Depending on the employed individual and their spot in life, they will have different priorities when enrolling in employee-sponsored benefit options. Those who have young children and those who know they have upcoming or consistent medical bills will want to thoughtfully consider the use of some employer-offered spending accounts.
First, a healthcare spending account allows for an employee to set aside a certain amount of money for medical expenses into an account, tax-free. There is a limit as to the amount that can be set aside, and if two spouses are both employees with this benefit option, they are each allowed to meet that set limit. Not electing to use a healthcare spending account could mean you lose more money to taxes that can legally be set aside specifically for you and your family’s medical needs.
A similar tax benefit employees may want to elect is a dependent care spending account. Basically, these are child care spending accounts. For parents who know that they spend a certain amount on childcare each year, this enrollment option provides them tax relief on the money they set aside for that hefty and important expense. There is also a set limit on this tax-benefit option, but it can still be extremely helpful to families.
These are just a couple of benefit enrollment options that workers should consider but mistakenly look over. It is smart to be proactive and to look over enrollment and tax matters as soon as possible and then to discuss any tax questions with a tax professional before making one’s benefit choices for the year to come.
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