Cafe 125 Deductions Explained: Smarter Benefits, Lower Taxes, Real Savings
Let’s be honest. Most people hear “ cafe 125 deductions ” and their brain shuts off. Sounds like tax soup. Dry. Government flavored. But here’s the thing. These deductions quietly save companies and employees real money every single payroll. Not theoretical savings. Actual dollars that stop going to taxes and start staying in pockets. Section 125 benefits aren’t new. They’ve been around for decades. What’s new is how many businesses still don’t understand them, misuse them, or avoid them because they “sound complicated.” They’re not. Or at least, they don’t have to be. If you’re an employer paying payroll taxes, or an employee watching chunks disappear from your paycheck, this matters more than you think. What Section 125 Benefits Actually Mean (No Fluff) Section 125 benefits come from IRS Code Section 125. Simple as that. This section allows employees to pay for certain benefits with pre-tax dollars. Pre-tax is the key phrase here. Before federal income tax. Before Social Security. Be...