What Last-Minute Tax Write-off Can Replace the Company Holiday Party in the Year of COVID?
If COVID has taught us anything, it has taught us to think outside the box. Everything that typically occurs throughout a business year has changed. People work from home. Interviews occur remotely. Zoom has replaced the conference room. And we have learned that many of those staff meetings could have been an email.
As the year ends, we see another staple in most businesses that must change. Holiday parties in the year of Coronavirus cannot take place. The gathering of coworkers and their families for a fun night out is destined to be another zoom happy hour with BYOB.
While this is a downer for many employees who look forward to the holiday party, it is also a lost tax write-off for employers. Under the tax laws, employer-sponsored company holiday parties are 100% tax-deductible in many circumstances. Therefore, employers must look for other ways to make up the tax write-off without exposing their employees to unnecessary risk.
Read on for ideas that may provide tax write-offs in place of the company holiday party.
Expand Those Employee Bonuses
Aside from the company holiday party, many employers offer holiday bonuses to their employees. These bonuses count as a payroll deduction for employers. Look at what you usually write-off from the holiday party. Divide that number by all the employees in your workplace. Then add that additional number to their employee bonuses.
You will benefit from the business tax write-offs. Your employees will benefit from some extra cash in their pockets, especially during a difficult year.
Offer an Extra Employee Benefit During the Holidays
Another option that can benefit employees while providing a tax benefit includes paying for an employee benefit in December. Maybe you will choose to pay for your employees’ health insurance.
However, many employers may choose another option. Since many health plans include an HSA, employers may choose to add additional money to the HSA account for employees. The HSA account balance will carry over to the following year. At the same time, you can receive a tax benefit for contributing to your employees’ health plans.
Instead of the HSA, you may also choose to contribute additional funds to your employees’ retirement savings plans. Contributions to your employees’ retirement plans offer an additional tax write-off while providing a benefit to your employee.
Make Purchases for Your Office
Business expenses are often tax write-offs. Now is the perfect time to buy that new printer. Maybe your staff needs new laptops. Maybe you need to upgrade your subscriptions to online meeting services. Whatever the expense, consider making it during this time of year.
Find Ways to Give to Charity
Of course, one of the best ways to obtain a tax write-off while embracing the holiday spirit includes giving to charity. However, you must be careful about the charity you choose. Charitable donations that promote your business do not provide the same tax benefit as a completely selfless act of kindness.
Look to conduct a food drive or coat drive. Then provide the items along with a check from the company to your chosen charity. The check will offer a tax benefit. However, the food or clothing drive will inspire team building amongst your employees and help everyone enjoy the holiday spirit a bit more.
Do You Need Help Implementing These Ideas?
Do not embrace any option without speaking with your trusted team of HR professionals, accountants, and attorneys. Your team of experts can help you determine the best options for your company and tax needs. The dedicated HR specialists at Workplace HCM are happy to help you understand your options and implement your chosen tax plan. Call 856.334.9711 to learn more.
