{Uncle Sam will award you by means of a tax break.|{Need|Want{} a tax break|tax relief}? Try Awarding your Employees}

There are very little tax loopholes these days that permit a company a deduction which is tax free to employees. Health insurance is one such tax free employer provided benefit. But there is another which is overlooked by employers. Achievement awards.
If planned properly, employee achievement awards can provide a tax deduction for the employer while remaining tax free to the member of staff. There are certain obstacles that must be overcome in order for the recognition award to be tax free. It all starts with the establishment of an Achievement Awards Program. Such a program may be a qualified program or an unqualified program.
Qualified programs must suit the following requirements:
1. The plan must be in writing.
2. Award cannot be compensated at the same time as annual salary reviews. It must be succeeding to an "achievement event" occurring.
3. It cannot be paid in cash or cash equivalents. It must be property, such as personalized awards, trophies, golf clubs, televisions, vacations etc.
4. Award cannot exceed $1,600.
5. Plan cannot be biased and favor highly compensated individuals.
6. The average cost of all employee recognition awards granted during the year cannot surpass $400. Awards of nominal worth are not integrated in the average. Nominal may be $50 or less.
7. Any gift with a worth in surplus of $1,600 have to be included in the employee's W-2 compensation.
8. The gift must be part of a "significant presentation", such as an recognition ceremony. The event need not be lavish.
Nonqualified programs must satisfy the subsequent requirements:

Recognition could be given for length of service, safety or some other achievement. The safety award does not qualify if the employer grants safety awards to more than 10% of the qualified employees throughout the year.
If you meet these requirements the gift is exempt from income tax and social security tax.
Of course you should always check with your Accountant, but this is another eligible way to shell out a slight less to uncle Sam.

Article Source: http://www.gamblingarticlessite.net

Coach Eddie Owner of www.awardmastersinc.com Eddie Hill Award Masters Inc. 1-800-800-4808 Employee Recognition Awards

Please Rate this Article

5 out of 54 out of 53 out of 52 out of 51 out of 5 

Not yet Rated