You’re frustrated. And a bit sad.
Another great employee just quit.
Now more than ever, employees are looking for a work-life balance that allows them to enjoy their daytime hours.
Have you ever wondered how big companies like Facebook or Google can offer such great perks to employees and retain them well?
It’s because of IRS Code Section 132.
What is Code Section 132?
Employee perks or incentives can vary widely by company. Code Section 132 allows you to deduct “certain fringe benefits” that are offered to your employees. Other fringe benefits may be excluded from taxable income under other sections of the Internal Revenue Code.
7 examples of legal fringe benefits
- Awards, including length-of-service, achievement and safety awards
- Gym or athletic center facilities. If you create a space exclusively for your employees, you can depreciate the property used and associated operating expenses.
- Retirement planning services. If you offer retirement plan options, you can also offer retirement planning services and deduct the expenses related to the services.
- Parties. Group meals, cocktail parties and family picnics are all included in fringe benefits.
- Gifts. Typical birthday and holiday gifts are all allowed according to the IRS.
- Snacks. Having a kitchen or a snack bar boosts employee morale, so stock up on employee favorites to nibble on.
- Entertainment. Gifting tickets to a local sporting event or theater production are all within the lines.
Contact the experts at Morgan & Associates with your questions about fringe benefits. We can help ensure your tax returns properly deduct fringe benefits and lower your tax payment.