Startup Provides Huge Potential Tax Savings to Small Business Owners
A startup business developed a powerful mobile app that is programmed to follow employee spending and keep track of all areas that are tax deductible. This could have major implications for large and small business owners, saving both their employee’s hard earned cash and also lowering their payroll taxes.
If you have a business with W2 full-time or part-time employees on the payroll, this could be a great implementation.
As the employer, all you need to do is connect your payroll to the app, and have your employees connect their debit and credit cards. The app searches for potential eligible spending and updates the payroll for you.
Eligible Spending for Tax Savings
The app provides 10 categories that are eligible for pre-tax spending, including categories such as:
- Child daycare, nannies, some pre-schools
- Adult care
- Day camp
- Certain prescription expenses
- Ride-sharing & mass transportation like train and bus passes
- Eye care including glasses and contacts
- Dental such as cleanings and various procedures
- Medical such as co-pays
Businesses have even seen as much as a 30% drop in employee turnover rate because of the savings they are seeing in their paychecks with the app. So far, enrolled individuals have seen an average of over $550 in take-home pay.
For example, an employee in the 35% tax bracket who spends $1500 per year on transportation, will save 35% of those spendings, giving them $525 back at the end of the year. As a business owner, you will not pay payroll taxes on that $1500 which will save you about $120 each year for that one employee.
This also helps business owners save about 8% of every dollar spent by employees pre-tax by lowering the premiums for Social Security, Medicare, unemployment, and local taxes.
How does Alice get paid?
The app is completely free to set up and use. If you realize any tax savings, the company will take 50% of those savings.