What does less other cafe mean on my W-2?

What does less other cafe mean on my W-2?

SECTION 125 is your employer’s benefit plan. It is also known as a “cafeteria plan”. Usually, what is reported there is your medical insurance premiums that are paid with pre-tax income. They are not taxed and are not included in your W-2 Box 1 wages so you can not deduct them as medical expenses.

Is 401k part of cafeteria plan?

What is a 401(k) cafeteria plan? A 401(k) cafeteria plan allows employees who are participating in their employer’s 401(k) plan to also choose additional types of benefits from a smorgasbord of options on a pretax basis.

What is a cafeteria plan contribution?

Employer contributions to the cafeteria plan are usually made pursuant to salary reduction agreements between the employer and the employee in which the employee agrees to contribute a portion of his or her salary on a pre-tax basis to pay for the qualified benefits.

Where does cafeteria plan go on W-2?

Your employer may report your cafeteria plan deductions in Box 14, which is labeled “Other.” It might use the code “Section 125” or “Café 125,” and then state your pretax payments. This data is optional and can clear up any confusion you have about the amount in Box 1.

What is code 125 in box 14 on w2?

Box 14 s125 is for the amount of premiums that you paid tax free under an employer’s Section 125 (or Cafeteria) benefits plan. It does not reduce your refund.

What is a disadvantage of cafeteria style plans?

Employees who exceed their allocated spending amount pay a partial premium to their employer. So if Emma spends $1,000 over her allocated contribution, she pays a portion of that amount herself. The disadvantage of a cafeteria plan is it usually takes more time to administer and is typically more complex.

How do I report a cafeteria plan on my taxes?

In some cases, cafeteria plan reporting on your W-2 is mandatory.

  1. Taxable Wages. Cafeteria plan benefits come in various forms, including health and life insurance, dependent care and adoption assistance, accident insurance and health savings accounts.
  2. Box 14.
  3. Box 12.
  4. Box 10.
  5. Tax Return.