Q. We are in the travel business and our office regularly receives free tickets to sporting events (worth $30 and up). We typically give them to employees who want to use them. Is such a gift ethical? — L.L., South Carolina
A. That depends on the ethical standards of your industry. The bigger concern is whether you must include the value of the tickets in . That is, whether the value might be taxable income to the employees.
While that holiday turkey given to employees has generally been considered to be too de minimis in value to tax, a gift certificate to buy that turkey is another matter. The IRS has considered gift cards as taxable income. Other incentives, like paid cruises, also have been deemed taxable income.
How to account for the receipt of the tickets and their distribution to employees can be tricky, so consult your accountant or tax attorney. You can also look at IRS rules on at www.irs.gov/pub/irs-tege/fringe_benefit_fslg.pdf. Remember that if something is taxable to employees, the employer must also pay its share of FICA taxes on the gift’s value.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/11030/free-tickets-to-employees-taxable-compensation "