Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Business Tax Relief and other Tax Relief topics.
DebtHelp.com Tip: Business owners have a variety of ways to decrease their tax burden (find tax relief). One such known category is ‘fringe benefits'. Fringe benefits are usually offered in addition to an employees wages and bonuses. The entire area of fringe benefits can be a complex one, but we will list some samples of how your company can become involved in them to gain some tax relief.
Here are some areas found in the fringe benefit category:
Retirement plans. This is by far the largest category of fringe benefits being provided by employers. Of course, there are a variety of plans to choose from. By making contributions to your employee's retirement plan, you are rewarding their loyalty and productiveness while also helping to secure their future.
Parking. When an employer pays for their employees parking, that can be deducted on the business tax return. Or, the business can pay the employee a cash stipend for parking. Either way, parking costs are an expense on the books.
Daycare. Build a daycare center on your work premises. Hire a daycare provider to come in and watch after your employee's children. This fringe benefit will help out the numerous families that are unable to gain employment due to not finding a decent daycare provider. Employers will receive a tax credit for providing child care for their employees.
Adoption benefits. When an employer pays a third party or reimburses an employee for qualified adoption expenses they are generally tax-free up to a limit of $10,160 per adoption. There is an income exclusion phase-out between $150,000 - $190,000.
Athletic facilities. If the facilities are on property owned or leased by the employer and are used substantially by employees, their spouses, and dependent children – the fair market value of athletic facilities is tax-free. This includes gyms, swimming pools, golf courses, and tennis courts. In order to qualify for tax-free treatment, the facilities must be open to all employees on a nondiscriminatory basis.
Group term life insurance. Corporations can take advantage of the fringe benefit of paying for their employees group term life insurance. This is a great tax relief item.
Employer paid health plans. Employers can receive tax relief by paying insurance premiums or making contributions for an employer –paid health, hospitalization, or disability, and/or accident insurance policy. The plans could cover employees, spouses, and dependents.
Long term care coverage. As more and more baby boomers are taking care of their elderly parents, this type of coverage is becoming more popular. It also will cover any of your employees who become chronically ill. By offering it to your employees, you can receive a tax relief.
Educational plans. By having a written Educational Assistance Plan in place, your business can take advantage of some tax relief by financing undergraduate courses for your employees. Your plan can cover books, supplies, and tuition.
On site meals. Did you ever wonder why some employers have a cafeteria on their premises? It is because the meals are 100% deductible to the business. This is true only if the meals provided are for the convenience of the employer, however. By having employees eat onsite, it may decrease the chances of extended lunch hours. It also saves the employer from being concerned about possible accidents outside of the workplace (such as an employee being involved in a car accident during their lunch break).
As can be seen, business tax relief is easily obtainable by providing employees with a variety of fringe benefits. The fringe benefits are treated and classified as a business expense on your tax return.
Your fringe benefit plan must be in compliance with IRS tax laws, otherwise your previous contributions or deductions to the