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

There are awfully little tax loopholes these days that allow a company a deduction which is tax free to workers. Health insurance is one such tax free employer provided benefit. But there is another which is overlooked by employers. Recognition awards.
If structured properly, employee achievement awards can provide a tax deduction for the employer while remaining tax free to the employee. There are certain obstacles that have to 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 gratify the following requirements:
1. The plan must be in writing.
2. Award cannot be paid at the same time as annual 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 nominal value are not integrated in the average. Nominal may be $50 or less.
7. Any award with a worth in excess of $1,600 have to be included in the employee's W-2 compensation.
8. The award must be part of a "significant presentation", such as an recognition ceremony. The event need not be lavish.
Nonqualified programs must satisfy the subsequent requirements:

Awards may 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 exempt from income tax and social security tax.
Of course you must always seek advice from your Accountant, but this is a new eligible way to shell out a little less to uncle Sam.

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

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

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