A client is asking whether it is better to have her employer establish an HSA under a cafeteria plan, or setting up her own plan independently of her employer.
From a tax standpoint, her own contribution to an employer's HSA would reduce not only her taxable income but also her social security/medicare wages, right? Her own plan would simply be in the "adjustments" section and not reduce her SS and medicare taxes.
Am I correct about this? This is the best information I have at this point.
The rest of the decision is economic. A "managed" plan under section 125 usually incurs fees at every turn.
From a tax standpoint, her own contribution to an employer's HSA would reduce not only her taxable income but also her social security/medicare wages, right? Her own plan would simply be in the "adjustments" section and not reduce her SS and medicare taxes.
Am I correct about this? This is the best information I have at this point.
The rest of the decision is economic. A "managed" plan under section 125 usually incurs fees at every turn.
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