Author: section125plan

The Real Meaning Behind a Section 125 Plan Let’s start simple. A section 125 plan sounds like some complicated tax code thing that accountants argue about over coffee. And yeah, technically it is part of the U.S. tax code. But in real life? It’s pretty straightforward. A section 125 plan—sometimes called a cafeteria plan—lets employees pay for certain benefits using pre-tax dollars. That’s the key part. Pre-tax. Instead of paying taxes first and then buying benefits like health insurance or wellness programs, the money comes out before taxes hit. That tiny shift changes a lot. Employees keep more of their…