Thursday, January 27, 2011

Medical and dental deductions - are they always pre-tax?

Question for those out there who are experts on payroll deductions: Deductions taken from my paycheck for medical, dental insurance, long-time disability, life insurance, etc...do all companies deduct this money from bi-weekly paychecks on a pre-tax basis or are there employers who do it on a post-tax basis? I have a full-time job as an engineer on a fortune-500 company. Thank you
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Well...it's more common for disability to be offered as post-tax (because then if you collect, the payments are tax free), but is *is* possible for a company to allow you to request that all benefits be deducted on an after tax basis. (I have co-workers who plan to retire in 3 years doing this.) The difference is that you will pay more in fica/mc and income tax. In exchange you *might* qualify for more ssa benefits when your retire or a higher pension....
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