Federal Income Tax Relief and Pre Tax Deductions
Federal income tax relief is easily found by using pre tax contributions wherever possible. Pre tax deductions lower reportable W2 income dollar for dollar for contributions towards: health insurance, dental insurance, vision insurance, supplemental insurance, flexible spending accounts, and qualified retirement plans. The lower the reportable W2 income as a result of pre tax contributions, the greater the amount of federal income tax relief.
The amount of income tax relief of course depends upon filing status and income level. Federal income taxes work on a progressive scale: tax rates go higher as taxable income rises.
Estimated Federal Income Tax Relief from PreTax Deductions
A family making $10,000 in pre tax contributions might see the following federal income tax relief from pretax payroll deductions:
| Tax Bracket | Federal Tax Savings |
| 10% | $1,000 |
| 15% | $1,500 |
| 25% | $2,500 |
| 28% | $2,800 |
| 33% | $3,300 |
| 35% | $3,500 |
