How flowers can make YOU an awesome boss.
These days, there’s more to happy employees than offering a good wage. Happy employees love where they work because they feel appreciation for being part of the success of the company. But, how can you benefit from showing appreciation to your employees without it costing them in taxable “income”.
When is it ‘de minimus’?
When giving flowers as a gift from an employer to an employee, it can be deductible in a business’ taxes. According to tax law, the IRS says that your income does not include the cost of de minimis fringe benefit given to an employee. In fact, the Latin translation for ‘de minimus’ is “about minimal things”. The IRS allows for illness, performance, and crisis as acceptable circumstances for an employer to give flowers to their employee and write it off. In addition, the IRS also looks as the frequency and the value of the gift to determine if it falls into the ‘de minimis’ fringe benefit category.
Can ‘de minimus’ go too far?
Some business owners take the ‘de minimus’ fringe benefits too far. The IRS will not consider your offer of a thousand dollars bonus check as a ‘de minimus’ benefit. Nor will they allow you to cover the costs for your employee to get to work every day. As you can see, these examples over extend the frequency and value which no longer makes the gift ‘de minimus’. Thus, you can expect that they will be rejected as acceptable tax deductions for you. Therefore, when considering giving your employee a ‘de minimus’ gift, the value of property or service must be small enough and infrequent enough that it would appear to be “too small” to account for it. Even though it may be small and infrequent, your ‘de minimum’ gift usually carries a big punch for your employees because it shows you care for them personally.
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No matter how small the value, cash and gift cards are never ‘de minimis’ fringe benefits. |
Other ‘de minimis’ fringe benefits you can offer:
Here is a list of other ‘de minimis’ fringe benefits you can give to your employees and gain a deduction on business taxes:
- Holiday parties for employees
- Meal for employees and their guest
- Birthday gift that is not in the form of cash
- Coffee and beverages
- Local telephone calls
- Personal use of office machinery occasionally, such as laptops and copiers. However, personal usage cannot exceed 15% of the machines use and employer must have written policies & regulations for restrictions.
- Flowers, books, fruit baskets, cards, and other touching gifts for special circumstances such as illness, crisis, and great performance.
At Paragon, we don’t want you to be paying unnecessary taxes. Our monthly accounting plans manage your receipts and expenses during the year so you can spend more time on your business. Let us take care of your accounting needs today!