"Christopher Green" <cj.green[at]worldnet.att.net> wrote:
- quote -

This may not be the case for State income taxes. Often the
state does not consider this to be a pretax deduction and
the amount withheld may sometimes be deductible on the
state return. Examination of the W-2 should indicate if
State wages were reduced by the sec 125 deduction.

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norris_watkins[at]hotmail.com (Norris Watkins) wrote:

- quote -

Have to ask them. "125" in this context often denotes a
Section 125, a so-called "cafeteria plan". If that is the
case, then the medical insurance was taken out before tax,
and the premiums aren't tax deductible.

Even if payroll deductions for medical insurance are
tax-deductible, they go on Schedule A, which imposes a
7.5%-of-AGI haircut: only so much of your medical expenses
(including insurance) as exceeds 7.5% of your AGI is
deductible.

Most companies that are savvy in these matters use a
cafeteria plan, which means your medical insurance has
already been deducted from your salary before taxes are
figured: you don't get to double-dip by deducting it twice.

--
Chris Green

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Norris Watkins wrote:

- quote -

Divide FICA by 6.2%, or MEDICARE by 1.45%, to get $5206+

As that looks a lot like 5360+120-273.53=$5206.47, you can
assume that your MED 125 is pre-tax for Social Security,
and is probably pre-tax for income tax.

In other words, it's already deducted from your pre-tax
pay, so you can't deduct it again.

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"Norris Watkins" <norris_watkins[at]hotmail.com> wrote:

- quote -

I think the "125" part of the "med 125" refers to a section
125 plan allowing for the expense to be taken out before
taxes. In this case, you would not be able to deduct the
cost of the insurance on your schedule A because you were
not taxed on the income used to pay for it.

Leigh

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norris_watkins[at]hotmail.com posted:

- quote -

So far, you've been advised your pay for 80 hours worked at
$67/hour rate, was $5,360. The math is straightforward.
(The "other" of $120 can't be explained from your report,
but you could find out from the payroll dept. of your
employer.)

- quote -

This is reporting the amount of your pay which was withheld
for Federal Income Tax.

- quote -

These two figures show the amount deducted, for *your share*
of Social Security and Medicare. Your employer will have
matched these contributions and forwarded the total to the
government.

- quote -

Apparently, you're being paid bi-weekly, and your employer
is deducting the $273.53 amount as your share of medical
insurance. This can be reported on Schedule as a legitimate
tax deduction -- only to the extent your total medical
expenses exceed 7.5 percent of your AGI (Adjusted Gross
Income).

However, based on your salary of around $140,000 annually
(26 x this stub), you may run into an itemized deduction
limit. You should read the instructions for Schedule A, and
note that if your AGI exceeds $139,500, there are
limitations on deductions.

Based on the questions you're asking, I would recommend you
seek advice from a competent tax advisor.

Bill

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Norris Watkins wrote:

- quote -

First off, your employer can't be deducting for medical
insurance unless you signed up. You should know what you
signed up for. Second, there's a clue in the description
"Med 125." It is probably a benefit under a Cafeteria Plan
and would be pre-tax. Third, why not just ask your employer?

--
Alan
http://taxtopics.net

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norris_watkins[at]hotmail.com (Norris Watkins) writes:

- quote -

Ask your payroll people. They should confirm that your
premiums are paid under a section 125 plan and are thus
pre-tax and nondeductible. See Publication 502.

Phil Marti
Topeka, KS

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I am a salaried employee who undesratnds very little on
taxes. If somebody could help me a little with this
complicated matter, I will be very grateful.

My payslip has 3 columns

Col 1 :
Earnings
Type Hours Rate Amount
OTHER 120.00
REGULAR 80 67.00 5,360.00

Col 2:
Taxes
FED WTH 898.75
FICA 322.80
MEDICARE 75.50
STATE 264.31

Col 3:
Deductions
MED 125 273.53

Col 4:
Net Pay $3,645.11

Med 125 is the medical insurance my company takes from my
paycheck. This comes to be around $7000 per year. How do I
find out if this was taken my paycheck before tax or after
tax.? Is this tax deductible? Are there any other conditions
that should be met so as to claim this as tax deductible?

Thanks for reading.
Any pointers will be greatly appreciated

-nw

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