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Southern MN | I think you're correct, $5000 and less and the employee pays no taxes. The employer can still deduct that $5000 as an expense though, so win-win.
If the employer starts giving "gifts" for compensation, they will no longer have the expense as a tax right off, To be fair then, the employer should only be expected to "gift" what they would normally pay minus what they would expect to save in taxes from reporting the expense. It doesn't matter if the gift is cash, gas, gift card, whatever, its all just a gift from the standpoint of the IRS.
I'm not a tax accountant so don't blame me for incorrect information. I would recommend reading the Small Farm Tax Guide for more information though: http://ruraltax.org/htm/small-farm-tax-guide | |
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How to pay help??
