Health · Chapter 15 · Tax-Advantaged Accounts
Section 125 Cafeteria Plan
Definition
IRC §125 arrangement letting employees pick benefits from a menu pre-tax — including health insurance and FSAs. Sole proprietors, partners, and more-than-2% S-corp shareholders can't participate (C-corp shareholders can).
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
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