Offering employee benefits is one of the most effective ways to attract and retain talent in a competitive Utah labor market. But benefits are only an asset if they are administered correctly. Errors in benefit deductions, missed retirement contribution deadlines, or ACA compliance failures can expose your business to IRS penalties, DOL audits, and employee relations problems.
FJ & Associates, PLLC provides benefits administration support integrated with your payroll and bookkeeping — so the numbers reconcile, the filings are accurate, and your employees receive what they’re promised.
Call (801) 927-1337 or email admin@cpaone.net to discuss your benefits administration needs.
The Accounting Side of Employee Benefits
Benefits administration has a financial compliance layer that HR software alone doesn’t solve. The IRS, Department of Labor, and Utah insurance regulations impose specific requirements on how benefits are structured, deducted, and reported. Our CPA team focuses on exactly this layer:
- Payroll deduction accuracy — correct pre-tax and post-tax treatment for each benefit type
- Employer contribution accounting — recording contributions to health plans, HRAs, HSAs, and retirement plans
- Benefits reconciliation — matching payroll deductions to actual plan invoices every month
- Retirement plan deposit timing — ensuring 401(k) deferrals reach the plan within IRS deadlines
- ACA compliance tracking — monitoring employee hours and reporting obligations
- W-2 reporting of benefits — Box 12, Box 14, and DD code reporting for employer-sponsored health coverage
Section 125 Cafeteria Plans
A Section 125 cafeteria plan allows employees to pay for certain benefits with pre-tax dollars — reducing both employee income tax and employer FICA. Common benefits offered through Section 125 include:
- Health, dental, and vision insurance premiums
- Flexible Spending Accounts (FSAs) for healthcare and dependent care
- Group term life insurance (up to $50,000 tax-free)
What many small business owners don’t know: A written plan document is legally required before you can offer pre-tax benefits. Operating a de facto cafeteria plan without a formal document — even if you’ve been deducting premiums pre-tax for years — is an IRS compliance failure.
We review your current benefit deduction practices, confirm you have (or help you obtain) the required plan document, and ensure your payroll system takes deductions in the correct pre-tax or post-tax bucket.
Retirement Plan Administration Support
401(k) Plans
The most common small business retirement benefit comes with strict IRS timing rules:
- Employee deferral deposits — for plans with fewer than 100 participants, employee contributions must be deposited “as soon as administratively feasible” — the DOL’s safe harbor is 7 business days after payday. Late deposits must be self-reported through the DOL’s Voluntary Fiduciary Correction Program (VFCP) and corrective earnings paid.
- Employer match or profit-sharing contributions — must be made by the tax return due date (including extensions)
- Form 5500 filing — plans with more than $250,000 in assets (or 100+ participants) must file annually with the DOL
We track contribution timing, flag late deposits, and coordinate year-end reconciliation with your plan administrator.
SIMPLE IRA Plans
SIMPLE IRAs are popular with businesses under 100 employees. Employee elective deferrals must be deposited within 30 days after the month in which they were withheld. We monitor this deadline and reconcile contributions quarterly.
SEP-IRA Plans
For business owners without employees (or with few), a SEP-IRA allows contributions up to 25% of compensation (max $69,000 for 2024). Contributions are made by the tax return due date including extensions. We calculate your maximum allowable contribution and coordinate with your tax return.
Health Insurance and ACA Compliance
Affordable Care Act (ACA) Employer Mandate
Applicable Large Employers (ALEs) — generally those with 50+ full-time equivalent employees — must offer minimum essential coverage or face the employer shared responsibility payment. We track FTE counts throughout the year and alert you when you’re approaching ALE status.
ACA Reporting (Forms 1094-C and 1095-C)
ALEs must file 1094-C and 1095-C with the IRS and distribute 1095-C to employees annually. We prepare these filings and reconcile them to your payroll records.
Small Business Health Care Tax Credit
Businesses with fewer than 25 FTE employees paying average wages under a certain threshold may qualify for a tax credit of up to 50% of employer-paid health insurance premiums. We identify eligibility and claim this credit on your business tax return. See our small business tax services for more on available credits.
Benefits Reconciliation: Closing the Gap Between Payroll and Billing
One of the most overlooked administrative headaches is the mismatch between what your payroll system deducted and what your insurance carrier or plan administrator actually billed. Employees start, terminate, or change elections mid-month. Carriers adjust rates. The result is overpayments, underpayments, and reconciliation nightmares at year-end.
We perform monthly benefits reconciliation — comparing your payroll deduction register to your carrier invoices — and catch discrepancies before they accumulate. This protects both the employer (avoiding overpayments) and employees (ensuring their deductions match their coverage).
W-2 Reporting of Benefits
Year-end W-2 reporting of benefits is an area where errors are common. The IRS requires specific reporting for:
| W-2 Field | What It Reports |
|---|---|
| Box 12, Code DD | Cost of employer-sponsored health coverage (informational only; not taxable) |
| Box 12, Code W | Employer and employee HSA contributions |
| Box 12, Code E or S | SIMPLE IRA contributions |
| Box 14 | Miscellaneous deductions including state disability insurance, certain union dues, or employer-paid group term life over $50,000 |
Incorrect or missing W-2 codes trigger IRS notices and can cause employee tax filing problems. We prepare W-2s as part of our payroll service and review every code before distribution.
Building a Benefits Package That Competes
If you’re considering introducing or upgrading your benefits package, we provide financial modeling on benefit costs and tax impact. A well-structured benefits package:
- Increases total compensation without equivalent increases in employer payroll tax (pre-tax benefits reduce FICA for both employer and employee)
- Improves retention — particularly important in Utah’s tight professional labor market
- Supports recruitment of higher-quality candidates
We model the cost-benefit tradeoffs alongside your financial forecasting and business advisory work.
Start Managing Benefits Like a Larger Company
Small businesses deserve the same level of benefits compliance rigor as large corporations — without hiring an HR department to manage it. FJ & Associates gives you that infrastructure.
Call (801) 927-1337 | Email admin@cpaone.net | 612 N Kays Dr Suite 120, Kaysville, UT 84037
Related Services:
- Full-Service Payroll Processing
- Payroll Compliance & Labor Law
- QuickBooks Online Setup & Support
- Small Business Tax Planning
- CFO Services & Financial Strategy
Author Bio | Missy Dennis, CPA | Partner | FJ & Associates, PLLC | Kaysville, Utah
Missy holds a Master of Accounting degree from the University of Utah and is a licensed Certified Public Accountant. She is committed to providing clear, accurate, and actionable guidance so clients can navigate complex financial decisions with confidence. With more than twenty years of public accounting experience, Missy Dennis specializes in: Tax preparation and tax advisory; Bookkeeping strategy alignment; Estate and trust taxation; Audit and consulting services; Low-income housing tax credits; Non-profit accounting; Small- and mid-sized business advisory.
