tax time reminder

Write Off Your Event, Not Your Employees

sky armory employee appreciation party

 

You might guess (correctly) that we’re a group who loves to party. The more the merrier and we also know the value of employee appreciation.  We often help companies plan employee events such as appreciation or awards luncheons and holiday parties. But did you know that these events are tax-deductible?

 

“Holiday parties, annual picnics, summer outings, and even employee meetings may qualify for a unique 100 percent tax deduction,” wrote Mark Battersby, a business, financial, and tax writer in a recent article in event trade publication InTents magazine. Expenses that are “appropriate and helpful” to the business are deductible, and any event that pumps up morale andbenefits your employees falls under that qualification. Simply by showing employees your appreciation, your event becomes 100-percent deductible.

 

Some fine print: Entertainment expenses must be primarily for the benefit of employees other than people who fall into an unfortunately-named “tainted group” – employees who are paid above $110,000, a 10 percent owner, or any family members of a 10 percent owner.

 

Did you hand out branded gifts last year? Keychains, pens, or even drink koozies can be considered business gifts, and because they’re branded they qualify as exceptions to the usual $25 limit for gift deductions. Branded items are deductible without limitation. 

 

There are different rules for gift certificates, monetary awards, and bonuses, so consult your tax advisor for the specifics. Expenses need to be substantiated; be sure to have all the pertinent details (date of event, how many attendees) recorded in your files. And don’t forget to party with your employees at SKY this year (and write it off next year)!