As you plan year-end appreciation for your team, remember that the IRS still distinguishes between taxable and non-taxable gifts.
- Gift cards remain taxable income, no matter the amount.
- De minimis gifts–the small, infrequent, low-value items like a mug or snack box–are generally non-taxable, as long as they aren’t cash or cash equivalents.
- Bonuses continue to be fully taxable wages and must be processed with appropriate withholding.
- Holiday parties and employee celebrations are typically non-taxable when held occasionally and primarily for staff.
As you plan ways to celebrate your team, our tax and accounting professionals can help you navigate the IRS guidelines and make informed choices that show appreciation without creating unexpected tax issues.