Maximize Tax Savings & Employee Benefits with Section 125
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| Boost Your Business and Empower Employees: The Game-Changing Benefits of Section 125 Plans! |
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| Section 125 plans—commonly known as Cafeteria Plans— |
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Offer a powerful way for corporations to reduce payroll taxes while enhancing employee benefits. |
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| Here's what you need to know in 2025 |
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| 3 Key Tax Advantages for an Employer |
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| Every dollar an employee contributes pre-tax reduces the employer’s obligation for: - Social Security (6.2%)
- Medicare (1.45%)
- Federal Unemployment Tax (FUTA)
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Health FSA Cont. Limits Increased |
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For plan years beginning in 2025, the Health Flexible Spending Account (FSA) salary reduction limit is $3,300. Employers can also contribute to FSAs, further enhancing the plan’s value. |
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Safe Harbor from Constructive Receipt |
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Section 125 offers protection from the IRS's constructive receipt doctrine, preventing employee benefit elections from being treated as taxable income. This allows employees to select their benefits without facing extra income tax liability. |
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| 3 Key Tax Advantages for an Employee |
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| Allows employees to choose between Taxable Income & Qualified tax-free benefits- - Health Insurance Premiums
- FSA's & HSA's
- Dependent Care Assistance
- Group-term Life Insurance
- Accident & Disability Coverage
- Adoption Assitance
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| Compliance Reminders for 2025 |
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- Employers must have a written plan document in place.
- Elections are irrevocable during the plan year unless a qualifying life event occurs.
- Plans must pass nondiscrimination testing to ensure they don’t favor highly compensated employees.
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| That's it for this month. We do more than just taxes and are always available to discuss potential tax savings with clients. Don't hesitate to contact us with any questions regarding these matters or any other issues you may have. |
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"Your referrals are always greatly appreciated" |
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| Visit our Website to see what we're up to: |
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| Did you miss last month's tax tips? Scroll down to learn about more savings you could be taking advantage of today! |
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| We are thrilled to announce Ascend's new partner as of May 2025: |
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Laura Birt has built a distinguished career in accounting, bringing over two decades of expertise from Chicago’s financial sector to Ascend Accounting Group. Her professional journey includes key roles such as an internal auditor at the Chicago Board of Trade, a commodity accountant at UBS, and a Vice President at ABN AMRO. Additionally, she has served as an accountant for a family office specializing in commercial and residential development. Being a graduate of Purdue University with a degree in accounting, Laura combines deep financial insight with a strong commitment to her community. Having lived in Northbrook for over 50 years, she is thrilled to be working in the town she proudly calls home. |
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| What This Means for Our Clients |
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- Continued focus on proactive, personalized service
- A strong advocate for strategic tax planning and compliance
- Reflects our continued commitment to excellence, leadership, and client service.
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| Take advantage of our promotional table to showcase your business |
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We’ve set up a dedicated promotional table where you can display materials, share information, and connect with potential customers. We encourage our clients to use this space to highlight your services and grow your brand. |
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| - Customized Pens
- Notebooks/Post It's
- Business Cards
- Branded Tech Supplies
- Stress Balls
- Stickers
...and so much more! |
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| Ascend Accounting Group, LLC 3175 Commercial Ave Ste 201 Northbrook, IL 60062 Office Number (224) 330-6700 |
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