We’re counting down until the year is up and your tax impact opportunity window closes.
And even if this is the busiest (and perhaps most profitable) part of the year for your business, opening up a little space in your calendar to talk about some year-end tax moves is only going to mean good things.
Let’s make sure you’re set up to get some potential last-minute tax savings. Grab a time with us here:
Another thing you’re probably thinking about this time of year is how you’re going to express your gratitude to your awesome staff via a year-end bonus or something similar.
Of course, this isn’t an area where you shouldn’t merely be optimizing your bottom line. This is a chance to create some joy around your business – We suggest you take it.
But with our macroeconomic picture growing ever tighter, finding the right way to let your employees know you appreciate them without shelling out a crazy amount might call for some creativity.
We’ve got some ideas for you on the year-end employee gifts front…
Employee Gifts: Some Ideas for Business Owners
“Feeling gratitude and not expressing it is like wrapping a present and not giving it.” – William Arthur Ward
It’s that time of year again. Trouble for some small companies is, it’s that time in what may be yet another year of struggling on the bottom line. Still, you want to thank your employees for their hard work. How do you give EOY employee gifts without breaking the bank?
There are many ways to say “thank you” quickly (even as 2022 runs out), even if you’re cash-strapped.
Hint: Go for more bang than buck.
EOY Employee Gifts: Tax considerations
If you give gifts as part of doing business — including thank yous for employees — you may be able to deduct all or part of the cost, but no more than 25 dollars for business gifts to each person during your tax year. Incidental costs — engraving, decorating, packaging, mailing — are generally not included in that limit.
Holiday gifts fall under de minimis benefits — what the IRS terms an item “considering its value and the frequency with which it is provided, is so small as to make accounting for it unreasonable or impractical.” (The IRS has previously ruled that individual items worth more than 100 dollars aren’t de minimis, just so you know.)
Cash or cash equivalent items (gift cards and the like) are never excludable from income. Gift certificates that allow your employee to receive an item that’s minimal in value, provided infrequently, and is “administratively impractical to account for” may be excludable as a de minimis benefit, depending on facts and circumstances, IRS says.
Whenever everybody’s favorite federal agency starts using phrases like “depending on facts and circumstances,” it’s only sensible to have a few questions. Feel free to check with us.
EOY Employee Gifts: What to give
Gift cards. These are first to mind these days, and they offer a lot of pluses for both giver and receiver as an appreciation gift: flexible amounts (easy on your bottom line), fast delivery (whether plastic or electronic), and available for a lot of products from electronics to gas to food to clothes.
If you’re trying to say thanks while watching your budget, the thought really counts. If your staff size allows, try to get each person something they as an individual would like. Maybe one of your folks is always talking (when they should be working, but that’s a story for another time of year …) about the movie they just went to. Maybe another staffer shops at Target every single weekend. Tailoring a gift card to such folks is easy, and they’ll appreciate even a smaller gift if they think you devoted thought to it.
Name brands might also buy you more appreciation than embossing. Is the expense of putting your company name on something really going to impress an employee more than a retail name they respect (Yeti tumblers and mugs, for instance, or a North Face beanie)?
Work-related. Too often all of us fall back on a coffee mug with the company name. That can work of course, but what about comfort at work? Use your eyes and ears for a few days and see if somebody would like a blanket to keep at their desk. Or a recharging station, a lunch box or bag, a desk fan, or a smartphone pop socket. Do they eat lunch at their desk? How about a desktop vacuum cleaner?
You can get many of these for little more than a $20 bill — and every time your folks ward off a chill or cool down after coming in from lunch, they’ll think of you. With fondness. And that’s one of the big points. (These gifts work for either remote or in-office situations, by the way.)
For the individual. Again, if staff size allows, think for a sec or ask a few questions discreetly of co-workers. Does your staffer love or despise candy, honey, chocolate, or cookies? Don’t leap at these choices just because they’re familiar. Does the worker embrace green living (stainless steel straws)? Spend a lot of time outdoors (sunscreen, lip balm, or touchscreen gloves)? Travel a lot (sleep mask, neck pillow, or packing cubes)?
A last point: Give the gifts in a way that embarrasses no one. Maybe leave it on their desk with a nice wrap job and card when they’re not looking. Email them the electronic gift card on the weekend.
A little effort can help make sure the delivery is part of the gift, discreet, and individual. After all, that doesn’t cost anything.
Maybe the employee gifts puzzle isn’t as much a money and tax matter as other questions, but we’re ready to advise on all your business needs.
In your corner,
The TCG Accounting Team