When you are stuck for an Idea to gift your emplyees for which they don't have to pay tax, look no further as we ave come up with a few ideas here.
When you are trying to come up with the perfect holiday gifts for your employees it is important to consider how taxes will come into play. This is because usually the IRS considers gifts to be compensation. Therefore, you have to be aware of the rules so your employees are not stuck paying taxes on what should have been a gift. It will take a bit of creativity on your part, but it allows the gift to stay a reward and not a tax burden. This article is going to get you started with some ideas that will allow you to give your employees tax-free gifts.Gifts under $25If you give your employees a gift valued under $25, it is considered tax exempt. Therefore, if you were not planning to spend much on employee holiday gifts you have nothing to worry about.
Connect the Gift to an Employee AwardIf the gift is tied to an incentive such as the highest sales or longevity, you do not have to worry about taxes. You can get as creative as you like with awards such as Custom Football Jerseys for “Best Football Fans”, but you have to make sure that you give them on an annual basis and they are consistent.
Charitable DonationsYou can give a charitable contribution in your employees name without having to worry about taxes and the amount you give can be any amount.Company Products or Job Performance AidIf you have products for sale that your employees enjoy, give them some free products for the holidays.
Gift an OutingYou are able to take a group of employees to an event and it will be tax-free. However, keep in mind you cannot do this with your relatives who work in your company and consider it a tax-free company expense.
Paying TaxesIf you decide to go with a non-tax exempt gift, be prepared to pay the taxes so your employees do not have to do so. Therefore, when selecting a gift, keep the price below what you had budgeted to spend to make sure you have the extra money ready for taxes. For example, if you planned to give out $100 gifts to employees you will end up paying about $135 total to include the taxes.
Filing Your TaxesTurbo Tax provides you with step by step instructions to insure that you get every deduction and credit that you are eligible for. TurboTax insures that you get the largest refund possible. They even have a free tax refund calculator available that allows you to know the amount of money that you will be getting back.
