Finding and retaining talent is one of the top priorities of employers. In a highly competitive market such as the Greater Los Angeles area, employers must not only pay competitive wages, but also offer additional benefits such as flexible work schedule and other fringe benefits. We at MiklosCPA, a California-based accounting and tax firm wish to provide clients and interested readers free tax resources and tips. It makes good sense to take advantage of offering tax-free benefits to your team while leveraging benefits from the tax deductions while they are still available.
There are numerous fringe benefits available for you to make your business more appealing while not increasing your costs. Your best employees may potentially decline higher wages offered by competitor primarily because of the benefits they have from your business.
These benefits such as Accident and Health Benefits, Dependent Care Assistance, Moving Expense Reimbursement, Transportation Benefits, and Working Condition Benefits – just to name a few- may not increase the gross income of your employees but can significantly build loyalty and increase their quality of life.
Here are some notable examples of employer sponsored tax-free benefits:
Your office is in downtown Los Angeles where pay for parking is a must?
As an employer, you can provide a Qualified Transportation Benefits. Many employers offer qualified parking benefits of up to $250 a month. This is a kind of benefit where your business can directly pay for employee parking costs. It’s tax-free extra money that can only be used for parking expenses, leaving your workforce with extra cash to use on something else!
Help the environment and encourage your office to take public transit!
Your business can also offer transit passes under the aforementioned Qualified Transportation Benefits. Say for example, a member of your staff takes the metro Gold Line downtown instead of driving on the 110 freeway. Your business may provide transit tokens or vouchers entitling a person to ride free of charge. Qualified transportation benefits often include up to $130 a month for public transportation costs. The IRS will even allow up to $20 a month for qualified bicycling commuting expenses!
Did you relocate your top talent from San Jose to Arcadia during the year?
If you, as an employer, paid for your associate’s relocation costs, some of those expenses may be tax-free. In general, if the move was more than fifty miles for a full-time job, the employer has the option to pay for reimbursements of household moving costs which are not taxable income for the newly hired and can be tax deductible expenses for your business! As always, exceptions exist and the details are important, so keep those receipts and check with a tax expert (like MiklosCPA) before claiming this benefit.
Bear in mind, tax reform may have altered the applicability of these benefits to your firm and employees. Regardless, employers must differentiate themselves from the rest of the competition. Employee benefits are a simple way to win loyalty and retain talent. As we all know, without a great team, no business can succeed. At MiklosCPA, we have helped businesses utilize benefits like the ones discussed as well as assist them with their accounting needs through our “virtual office” services. If you are interested in learning more about our services, contact us!
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