What does that mean?
The guy I’m having an argument with says:
“Most if not all employeers list Healthcare and other bennies on the W2. For instance, Tribune and Post-Newsweek both list Pre Tax and Taxable witholding. However, I believe that at a one time in one of the proposed bills, there was a provision to do away with the pretax medical bennies.”
I said I don’t think so.
Some do list it, but it has an asterisk next to it, or something to identify that it’s not a taxed item. It’s a pre-tax deduction.
I’m not sure on W-2’s, but on pay settlements, all deductions must be shown. I’m looking at my Wife’s right now. It shows a summary total of Cafe 125’s but it does not break them out, nor is it taxed. The only reason for showing is so that you, and the IRS, knows why the totals don’t equal gross pay.
As far as “bennies” go, I’m not sure what he’s talking about. You can deduct the portion of your health premiums that you pay, up to a max of 7.5% of your adjusted gross income.
This is all covered in Bush’s Tax Relief and Health Care Act of 2006.
The amount shown on line 12 for health insurance is the amount deducted from an employee's pay check. It's useful in case your medical expenses exceed 7 1/2 % of adjusted gross income. At least 95% of the tax returns I prepare never get past that threshhold.