SEC125

Discussion in 'Tax' started by Ken, Apr 13, 2004.

  1. Ken

    Ken Guest

    I have an amount marked SEC125 in box 14 of my W2 form.
    This site: http://www.lynncompany.com/sec125_401k.html
    indicates: Section 125 P.O.P. allows employee payroll
    deductions for most group health, dental, vision, and life
    insurance premiums to be taken before FICA/Med, SDI, federal
    and state income taxes. However I'm using TurboTax to do my
    Taxes for 2003 and it doesn't give me any options to use
    this info in any useful ways to reduce my taxes. Is this
    amount supposed to be in a different box? Shouldn't this be
    a pretax deduction that would reduce my tax burden? Any
    help on this should be appreciated.

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    Ken, Apr 13, 2004
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  2. Ken

    Phil Marti Guest

    (Ken) writes:

    > I have an amount marked SEC125 in box 14 of my W2 form.
    > This site: http://www.lynncompany.com/sec125_401k.html
    > indicates: Section 125 P.O.P. allows employee payroll
    > deductions for most group health, dental, vision, and life
    > insurance premiums to be taken before FICA/Med, SDI, federal
    > and state income taxes. However I'm using TurboTax to do my
    > Taxes for 2003 and it doesn't give me any options to use
    > this info in any useful ways to reduce my taxes. Is this
    > amount supposed to be in a different box? Shouldn't this be
    > a pretax deduction that would reduce my tax burden?


    It already did. If you compare box 1 of the W-2 with the
    gross pay YTD on your last 2003 paystub you'll find that the
    section 125 amount has already been deducted.

    Phil Marti
    Topeka, KS

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    Phil Marti, Apr 14, 2004
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  3. (Ken) wrote:

    > I have an amount marked SEC125 in box 14 of my W2 form.
    > This site: http://www.lynncompany.com/sec125_401k.html
    > indicates: Section 125 P.O.P. allows employee payroll
    > deductions for most group health, dental, vision, and life
    > insurance premiums to be taken before FICA/Med, SDI, federal
    > and state income taxes. However I'm using TurboTax to do my
    > Taxes for 2003 and it doesn't give me any options to use
    > this info in any useful ways to reduce my taxes. Is this
    > amount supposed to be in a different box? Shouldn't this be
    > a pretax deduction that would reduce my tax burden? Any
    > help on this should be appreciated.


    It WAS a pretax deduction and it DID reduce your tax burden.
    Your software isn't doing anything with it because it's
    already been done.

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    Sassy Baskets, Apr 14, 2004
    #3
  4. (Ken) wrote:

    > I have an amount marked SEC125 in box 14 of my W2 form.
    > This site: http://www.lynncompany.com/sec125_401k.html
    > indicates: Section 125 P.O.P. allows employee payroll
    > deductions for most group health, dental, vision, and life
    > insurance premiums to be taken before FICA/Med, SDI, federal
    > and state income taxes. However I'm using TurboTax to do my
    > Taxes for 2003 and it doesn't give me any options to use
    > this info in any useful ways to reduce my taxes. Is this
    > amount supposed to be in a different box? Shouldn't this be
    > a pretax deduction that would reduce my tax burden? Any
    > help on this should be appreciated.


    Section 125 deductions have already been removwed from your
    taxable wages (for income tax, not for Social Security). You
    have already received all the tax benefit that is coming to
    you from these deductions; you can't deduct them anywhere
    else, because that would be deducting them twice.

    --
    Chris Green

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    Christopher Green, Apr 14, 2004
    #4
  5. Ken

    Bob Sandler Guest

    > I have an amount marked SEC125 in box 14 of my W2 form.
    > This site: http://www.lynncompany.com/sec125_401k.html
    > indicates: Section 125 P.O.P. allows employee payroll
    > deductions for most group health, dental, vision, and life
    > insurance premiums to be taken before FICA/Med, SDI, federal
    > and state income taxes. However I'm using TurboTax to do my
    > Taxes for 2003 and it doesn't give me any options to use
    > this info in any useful ways to reduce my taxes. Is this
    > amount supposed to be in a different box? Shouldn't this be
    > a pretax deduction that would reduce my tax burden?


    The amount of wages in box 1 of your W-2 has already been
    reduced by the SEC125 amount. Your tax has therefore been
    reduced because your reported wages are lower. The amount in
    box 14 is just for your information.

    If you are an employee of New York City or certain New York
    City agencies, then the SEC125 amount may affect your state
    taxes. In TurboTax it should be entered in box 14 of the W-2
    with type code G or H, depending on whether or not it is
    subject to NY State tax. If you don't know whether your
    particular NYC Section 125 plan is subject to NY State tax,
    you will have to ask your employer. To find more information
    in the TurboTax Help, enter "Section IRC125" in the "Have a
    question?" box and select the first item in the results
    list, "Section IRC125 Flexible Benefits Program."

    Bob Sandler
    not a tax professional

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    Bob Sandler, Apr 14, 2004
    #5
  6. Ken

    Ken Guest

    Thank you all for the quick responses. Getting tax advice
    at this time of year is fustrating at best. Good luck to
    you all.

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    Ken, Apr 18, 2004
    #6
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