{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 an employer a deduction which is tax free to workers. Health insurance is one such tax free employer provided benefit. But there is one more which is overlooked by employers. Recognition awards.
If planned accurately, employee achievement awards can provide a tax deduction for the employer while remaining tax free to the worker. There are certain hurdles that must be overcome in order for the recognition 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 satisfy the following requirements:
1. The plan ought to be in writing.
2. Reward 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 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 value in surplus 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 recognition ceremony. The event need not be lavish.
Nonqualified programs must satisfy the subsequent requirements:

Awards could be given for length of service, safety or some other recognition. The safety gift 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 excepted from income tax and social security tax.
Of course you must always seek advice from your Accountant, but this is an additional eligible way to shell out a little less to uncle Sam.

Article Source: http://www.justenjoylife.com

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

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