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

There are incredibly few tax loopholes these days that allow 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 planned properly, employee recognition awards can provide a tax deduction for the employer while remaining tax free to the worker. There are certain obstacles that have to be overcome in order for the achievement award to be tax free. It all starts with the establishment of an Achievement 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. Reward cannot be paid at the same time as annual 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 average cost of all employee recognition awards granted throughout the year cannot surpass $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 must be included in the employee's W-2 compensation.
8. The award must be part of a "significant presentation", such as an awards ceremony. The ceremony need not be lavish.
Nonqualified programs must satisfy the following 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 eligible employees throughout the year.
If you meet these requirements the gift is exempt from income tax and social security tax.
Of course you should always consult your Accountant, but this is a new qualified 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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