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

There are very little tax loopholes these days that allow 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 unnoticed by employers. Achievement awards.
If planned properly, employee recognition awards can offer 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 establishment of an Recognition Awards Program. Such a program may be a qualified program or an unqualified program.
Qualified programs must gratify the following requirements:
1. The plan should be in writing.
2. Reward cannot be compensated at the same time as yearly salary reviews. It must be subsequent 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 average cost of all employee recognition awards granted during the year cannot surpass $400. Awards of insignificant worth are not integrated in the average. Nominal may be $50 or less.
7. Any award with a value in surplus of $1,600 must 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:

Recognition might 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 reward is exempt from income tax and social security tax.
Of course you should always talk to your CPA, but this is an additional eligible way to shell out a little less to uncle Sam.

Article Source: http://casinoarticles.us

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

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