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Tax season sharply reminds employees how much cash Uncle Sam takes from their paychecks - and accounting firm staff are even more aware of this. Many already take advantage of benefits such as tax-exempt health savings accounts, group term-life insurance and even tax-deferred benefits in retirement plans. Some fringe benefits, however, are lesser known for their tax-exempt status. Here, compiled by our colleagues at Employee Benefit News, are seven tax-free benefits that keep cash in employees' pockets, as well may provide attractive deductibles for employers. (Images: Thinkstock)
<b>1. Frequent flyer miles</b>
Employees who fly often on business can earn miles tax-free when they pay with a personal credit card for reimbursed corporate travel. When used as a rebate, the IRS permits employees to exclude frequent flyer benefits from taxable compensation. IRS Announcement 2002-18 specifically states: "This relief does not apply to travel or other promotional benefits that are converted to cash, to compensation that is paid in the form of travel or other promotional benefits, or in other circumstances where these benefits are used for tax-avoidance purposes."