New tax laws have made it more costly for employers to reward their employees for exemplary service, years on the job or just for being an awesome someone to have in the office. Why? Because all the old standbys are now taxable!
Good old-fashioned cash? Taxable. Gift cards, lodging, tickets on the fifty-yard line? Taxable. Stock in the company? Bonds? Pretty much any non-tangible property you can think of as a reward for achievement? They’re all taxable. Of course, we’re not recommending you forego rewards as a way of doing business. Far from it. What we do recommend going forward is to be sure you know the true cost of your reward and operate accordingly.
Confused? Have questions? Feel free to talk with us about this and any other tax or accounting questions at Go Figure.