These deductions are only made if the employee agrees to them. This money pays for different benefits that the employee has elected to participate in. Examples include health and life insurance premiums, employee stock purchase plans, retirement contribution plans, and union dues.
Voluntary deductions can be paid with after-tax or pre-tax dollars depending on the benefit. Some pre-tax deductions reduce wages subject to federal income tax while other deductions reduce wages subject to Medicare and Social Security taxes. Publications 15 and 15-B show the benefits that are pre-tax.
For further questions about Phoenix new business accounting, please contact Singer Tax & Accounting, PC today at (602) 482-8006.