Pre Tax Transactions

Pre tax transactions are items that are added or deducted before taxes are calculated.  If you do not have any pre tax transactions go to Miscellaneous Deductions.

There are three types of transactions:

1.  Item is added to check and taxed as setup.

2.  Item is added to check, taxed as setup then subtracted back off the check.

3.  Item is subtracted from check prior to calculating the tax on exempt tax types.

Pre tax transactions include items such as a 401k plan, 403b plan, 457 plan, Simple Ira, and life Insurance.

If you need additional pre tax items click the add button

 

The ID Number will automatically display Description  will be the deduction title.

Type  choose either Regular Type, 401k or Simple IRA.

Limit  is to set the maximum non taxable limit for this plan.

Note:  The maximum limits for a 401k and simple IRA are already programmed into the tax tables.

Box 12 Letter Designation  is letter code for this item that will be printed on the W2 form. If no letter is chosen then the item will not be on the W2.

Box 14 Description  By entering a description here this item will be printed with the amount in box 14 on the W2.

None  if this box is check the item will not be included on the W2.

Subject To  The Pre Tax Transaction is subject to all checked taxes.  Uncheck any taxes that do not apply to the Transaction.

Tax Handling Method  Selects how this transaction is to be handled:

•      Item is added to check and taxed as setup.

•      Item is added to check, taxed as setup then subtracted back off the check.

•      Item is subtracted from check prior to calculating the tax on exempt tax types

IMPORTANT  Once this type of transaction is setup the Tax Handling Method NOT be changed.