Are Employee Christmas Gifts Taxable

Christmas party gifts, tax implications for companies and employees.?

We are planning our X-mas party and want to give some cards gift / reward potential cash prize & Bigger such a large TV screen or a trip somewhere. I brought up the fact that any of these "gifts" is considered taxable and we will either need to issue a 1099 for the amount of prize, or if the company wanted to put it in their paychecks on a "grossed up "amount to cover taxes. (As if they win $ 50 add $ 70 in wages to equal a $ 50 prize after taxes) Am I correct in the sense if you give these things out, you must include them in wages or issue of 1099. I am no tax expert & not trying to avoid paying taxes, It just do not want the "prize" to be a negative feeling since employees may have to pay taxes on it. Any good suggestions handing it to minimize the chance that employees will view it as a negative? Thanks for your time.

As bostonianinmo said, you have to treat it as income so they pay income tax, social security tax, Medicare tax, and state income tax on the value of the prize. So if you would have seen it as a negative, you can give each an additional amount – $ 25 cash if they win a $ 50 prize. They have to pay tax on $ 75 but they have $ 25 where to do so. That way you are heroes – if they were such a prize, it's like it even more if it were an after-tax prize – if they do not want This, at least it does not cost them anything. And I take no credit for them by telling them why you are getting money – to make a prize after-tax one.

Authors@Google: Ramit Sethi

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Are Employee Christmas Gifts Taxable

Are Employee Christmas Gifts Taxable