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

There are awfully few 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 structured properly, employee recognition awards can provide a tax deduction for the employer while remaining tax free to the employee. There are certain hurdles that must be overcome in order for the achievement award to be tax free. It all starts with the establishment of an Recognition Awards Program. Such a program may be a qualified program or an unqualified program.
Qualified programs must suit the following requirements:
1. The plan should be in writing.
2. Prize cannot be paid at the identical 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 typical cost of all employee recognition awards granted throughout the year cannot exceed $400. Awards of nominal value are not integrated in the average. Nominal may be $50 or less.
7. Any gift with a worth in excess of $1,600 have to be included in the employee's W-2 compensation.
8. The award must be part of a "meaningful presentation", such as an awards ceremony. The ceremony need not be lavish.
Nonqualified programs must satisfy the subsequent requirements:

Awards could be given for length of service, safety or some other achievement. The safety gift does not qualify if the employer grants safety awards to more than 10% of the qualified employees during the year.
If you meet these requirements the gift is excepted from income tax and social security tax.
Of course you must always check with your Accountant, but this is an additional eligible way to pay a little less to uncle Sam.

Article Source: http://sports-articles.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