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Practical Steps to Building a Cafeteria Plan

The following are tips for developing a cafeteria plan than can help you successfully implement you plan.

Project Costs

With professional assistance if necessary, project the total costs that will be added to your business by adding one or more cafeteria plans.  Aside from the deductible contribution costs, factor in overhead expenses, administrator fees (if applicable), and lost business time.  These factors will vary based on your level of experience, whether you are doing self-administration, and the size and character of your plan or plans.   

Design the Cafeteria Plan

Once you have chosen what kind of cafeteria plan(s) you will offer at work, the plan or plans must be designed.  Remember, in order for the plan to be qualified for tax purposes, it must be written.  Now is when you choose whether to run the plan yourself, or enlist the services of a professional or financial institution, such as a bank or insurance company.  

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