{Uncle Sam will award you with a tax break.|{Need|Want{} a tax break|tax relief}? Try Awarding your Workers}

There are awfully little tax loopholes these days that permit an employer 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 accurately, employee achievement awards can provide a tax deduction for the employer while remaining tax free to the member of staff. There are certain hurdles that have to be overcome in order for the recognition award to be tax free. It all starts with the setting up 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. Reward cannot be paid at the same time as yearly 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 achievement awards granted throughout the year cannot exceed $400. Awards of nominal worth are not integrated in the average. Nominal may be $50 or less.
7. Any award with a worth in excess of $1,600 must be included in the employee's W-2 compensation.
8. The award must be part of a "significant presentation", such as an recognition ceremony. The ceremony need not be lavish.
Nonqualified programs must satisfy the subsequent requirements:

Recognition could be given for length of service, safety or some other recognition. The safety award does not qualify if the employer grants safety awards to more than 10% of the eligible employees throughout the year.
If you meet these requirements the award is exempt from income tax and social security tax.
Of course you should always talk to your CPA, but this is another eligible way to pay a little 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

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