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On Tax Free Benefits

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]

There are three categories of benefits that hospitals typically provide to their physician [hospitalists], medical, nursing or technical employees; or clinics, office and medical practices provide to their employed staff:

Those that are totally income tax-free; some are still taxable for FICA (Social Security and Medicare).

Those that are not taxed at their full economic value, or are taxed at a special preferential rate.

Those where a tax liability is not incurred until sometime after the employee receives the benefit.

1. Tax-free Benefits

The following are benefits typically provided that are tax-free to physicians and hospital employees:

• Group term life insurance
• Accident and health benefits
• Moving expense reimbursement
• Dependent care expenses
• Meals and lodging
• Adoption expense assistance
• Use of athletic facilities
• Employee awards
• Educational assistance
• Qualified employee discounts
• No additional cost services
• Retirement planning service
• De minimus benefits
• Qualified transportation benefits
• Working condition benefits
• General fringe benefits
• Miscellaneous specialized provisions

All tax-free benefits have varying conditions, which can include:

• What constitutes a benefit to qualify (as defined by the IRS)
• What constitutes an employee to qualify; the most commonly restricted employee types are S corporation employees who owned greater than 2% of the corporation’s stock in the taxable year, highly compensated employees and key employees.
• Which employees are excluded
• Monetary caps
• IRS reporting requirements
• Exclusion from what type of taxes (income, FICA and FUTA)

Assessment

And so, what has been your experience with the above; is the tax-free benefits package increasing or shrinking, please comment and opine?

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

• PRACTICES: www.BusinessofMedicalPractice.com
• HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
• CLINICS: http://www.crcpress.com/product/isbn/9781439879900
• ADVISORS: www.CertifiedMedicalPlanner.org
• FINANCE: Financial Planning for Physicians and Advisors
• INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
• Dictionary of Health Economics and Finance
• Dictionary of Health Information Technology and Security
• Dictionary of Health Insurance and Managed Care 

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