Tuesday, November 29, 2005

Talking Turkey About Employer Gifts

AccountingWEB.com - Nov-23-2005 - For many businesses, holiday gifts are a tradition. As with most gifts, some prefer tangible items, like turkeys or hams, other prefer things that can be used in the office, such as mouse pads, books or pens, while still others prefer cash because it is more versatile. There is another reason a company might prefer to give things like turkeys or mouse pads: taxes.

To the Internal Revenue Service, gifts such as turkeys and hams are nominal gifts having minimal dollar value meaning they fall under the de minimis fringe benefits rules. In other words, they can be given to employees without being included as part of employee wages that are subject to withholding and taxes, according to a statement from the National Association of Tax Professionals.

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