Tax Consequences of Employee Holiday Gifts

Tax Consequences of Employee Holiday Gifts

It is common practice this time of year for employers to give their employees gifts. Where a gift is infrequently offered and has a fair market value so low that it is impractical and unreasonable to account for it, the gift’s value would be treated as a de minimis fringe benefit. As such, it would be tax-free to the employee, and its cost would be tax deductible by the employer. De Minimis Benefits – In general, a de minimis benefit is one that…

Avoid Tax Surprises When Making Holiday Gifts to Employees

As the year draws to a close, many businesses look for ways to recognize and thank their employees. From gift cards to holiday treats to service awards, the options are plentiful. But not all gifts are treated equally by the IRS. The tax implications depend on factors such as the type and value of the gift. Understanding these distinctions can help avoid costly tax surprises for both your business and your team. Year-End Bonuses and Similar Paym…