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

There are incredibly 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. Recognition awards.
If planned accurately, employee recognition awards can provide a tax deduction for the employer while remaining tax free to the member of staff. There are certain hurdles that must be overcome in order for the achievement award to be tax free. It all starts with the setting up of an Recognition Awards Program. Such a program may be a qualified program or an unqualified program.
Qualified programs must satisfy the following requirements:
1. The plan should be in writing.
2. Prize cannot be paid at the identical time as annual salary reviews. It must be succeeding to an "achievement event" occurring.
3. It cannot be compensated 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 included in the average. Nominal may be $50 or less.
7. Any gift with a worth in surplus of $1,600 must be included in the employee's W-2 compensation.
8. The gift must be part of a "meaningful presentation", such as an recognition ceremony. The ceremony need not be lavish.
Nonqualified programs must satisfy the subsequent requirements:

Awards might 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 reward is excepted from income tax and social security tax.
Of course you should always seek advice from your CPA, but this is a new eligible way to pay a little less to uncle Sam.

Article Source: http://www.gambling-articles.org

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

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