TaxBandits Knowledge Base

What are pre-tax deductions?

Pre-tax deductions are taken from the employee’s wages before any taxes withheld. Pre-tax deductions reduce the taxable income so that employees can pay lower yearly taxes. Some of the common examples of Pre-tax deductions are

• Health Insurance
• Dental Insurance
• Health savings account
• Retirement plan 401K non-exempt organization
• Simple IRA.