OTHER NEWS - Oct. 14, 1991

Small Businesses Losing Tax Benefits: Thousands of small businesses are losing valuable tax savings for themselves and their workers by neglecting to provide flexible fringe-benefit plans for employees, a study indicates. Only 31% of companies in the accounting firm Grant Thornton’s survey offer “cafeteria plans,” which permit employees to select the benefits they need most. Money a worker pays for such coverage is exempt from Social Security and income taxes, which benefits employers as well. “Over the past few years, businesses and individuals have become severely limited in the number of tax deductions available to them,” noted Andrew E. Zuckerman of Grant Thornton’s Washington office. The tax saving available from cafeteria plans “can help to offset the spiraling costs of health care in this country,” he said.