Tax reform law makes changes to employee achievement award rules

Tax Reform Tax Tip 2018

  

Experienced Tax Accountant – The IRS reminds employers that last year’s Tax Cuts and Jobs Act made changes to several programs that can affect an employer's bottom line and its employees' deductions. This includes employee achievement awards.

Here are some facts about these changes:

Under previous law:

Employers could deduct the cost of certain employee achievement awards. Deductible awards were excludible from employee income.

Under the Tax Cuts and Jobs Act:

There is now a prohibition on cash, gift cards and other non-tangible personal property as employee achievement awards.

Special rules allow an employee to exclude certain achievement awards from their wages if the awards are tangible personal property.

The new law clarifies that tangible personal property doesn’t include cash, cash equivalents, gift cards, gift coupons, certain gift certificates, tickets to theater or sporting events, vacations, meals, lodging, stocks, bonds, securities, and other similar items.

If you would like to discuss how these changes affect your particular situation, and any planning moves you should consider in light of them, please give me a call.

Very truly yours,

Amare Berhie, Senior Accountant           

CEO, ABA Tax Accounting

CFO Services http://youtu.be/EYJdQtbPZAI

http://abataxaccounting.com/salestaxproblem.php

amare@abataxaccounting.com   

(651) 300-4777