Cutting your tax bill on the front end
byFeb 25th 2008 5:30PM
My employer takes the deduction for my health insurance premium pretax. That's $49 per week untaxed. My employer-provided life insurance premium is paid pretax. That's another $4 untaxed. My company-sponsored IRA account gets $5 per week untaxed, as well as the untaxed contributions which my employer makes to my IRA, out of the goodness of their hearts.
There are other payments which you can make with pretax dollars also. Consult with your employer to see if they enable these types of benefits. As far as I know, the law doesn't require employers to provide these options but many employers do because they can improve workforce morale. It might also be advisable to consult with a tax preparation professional regarding the long term effects and conditions of these types of benefits. Pretax deposits to IRA accounts can later become taxable if you access them before you reach certain age thresholds.