Are Employee Gifts Tax-Deductible?

When tax season rolls around, are you scouring your books to make sure you’re collecting every deduction that you’re due? Some 30% of small businesses today believe they overpay on their taxes because they miss out on valuable deductions. 

Gifts to employees are a recurring expense for most business owners. Expenses throughout the year, such as branded drinkware or apparel for new employees, holiday gifts, and raffle prizes can easily be forgotten or go unnoticed when it’s time to file.

With all of that in mind, the question stands: Are employee gifts tax-deductible?

Like with many questions related to tax deductions, the answer is yes but with some caveats. At Myron, we offer an expansive catalog of employee gifts for any occasion. Keeping track of these throughout the year will prep you for next season. Read on to learn more about the rules, exceptions, and which gifts qualify to be tax-deductible. 

The Rules 

It starts with a restriction on the amount you can deduct. The Internal Revenue Service (IRS) allows you to deduct employee gifts up to $25 per gift recipient. This limit applies for the duration of the tax year. Note that the $25 cap applies to business gifts that you have given both indirectly and directly. For example, if you and your spouse gave gifts to the same person, you are both treated as a single taxpayer. 

Gifts that fall under this umbrella must be tangible items and don’t include activities or gestures such as taking an employee out for coffee or lunch. Eligible gift items must be separate from the employee’s gross income. Cash or gift cards are not considered eligible items.

Now that you understand the general rules, what do you need in order to record the deductions?

The IRS requires you to keep documentation of any gift to receive the deduction. Keep the receipts as they accumulate throughout the year, as you will need to show a record of the amounts spent on gifts.  Also make sure to note the business purpose the gift serves — when it comes to tax deductions, the IRS wants to know that this expense was value-driven. 

The Exceptions

So, what are the caveats?

The IRS allows wiggle room above the $25 limit for things like packaging and engraving, given that they provide value to the gift. If you purchase your employee an engraved plaque, for example, you can deduct the $25 for the plaque, and up to $100 on the engraving service. 

The engraving service is considered an incidental expense, as are things like packaging, wrapping, and shipping costs. 

Gift Ideas You Can Deduct

Since you receive a tax credit for your employee gift, use some discernment to ensure that you get your money’s worth. Having a game plan for the gifts you select will not only ensure that you are choosing thoughtful gifts, but also will give you the chance to record the unique purpose of each gift ahead of time.

As an example, pens and notepads are excellent gifts for new employee onboarding. On average, new employees complete 54 tasks during their onboarding processes. Having a company-branded pen and notepad is a highly practical and useful way of saying “Welcome to the team.”

Here are some practical pens and pads you can explore as valuable business gift solutions for your employees and record in advance of tax season:

Pens and pads aside, think outside the box when gifting your employees. You can find an array of impactful gifts for any of your employees while easily staying within the $25 limit. 

Here are some other gift options to consider:

  • A new coffee mug for employees to enjoy coffee daily or specialty beverages like  hot chocolate when the weather gets colder
  • A laptop bag that lets them travel efficiently and attend meetings in style
  • A master planning calendar to celebrate a new promotion
  • New sunglasses to get ready for team outings in the sunshine
  • Durable plastic water bottles to stay hydrated throughout the day

Shop for the Best Tax-deductible Gifts

The employee gift tax deduction has been around since 1962, yet it’s a credit that many business owners don’t know about. With a bit of organization and attention to detail, you can take advantage of the business gifts you distribute throughout the year and ensure you get what you are owed when tax season comes around. 
Need more tax-deductible gift ideas? Check out some of our best sellers to get started.

How much should you spend on employee gifts?

Gift-giving is an age-old tradition that promotes harmony and establishes strong relationships. Giving gifts to employees helps them feel appreciated and seen as a member of your team. But there is a way to go about it that ensures that everyone is happy without breaking the bank.

Keep reading to answer the question we’re all asking, ‘how much should you spend on employee gifts?’

What are the best gifts to give?

Psychologically the two best types of gifts to give are experiential gifts and personalized promotional gifts. These gifts create memories that last a lifetime. These make people feel special and foster a sense of belonging.

As an employer, it’s difficult to offer experiential gifts on a regular basis, especially if you have a very large team. These gifts are best held as events every 4-6 months. Personalized gifts are easier to offer when you want to show your team some appreciation. They also come in handy during team events. 

Our website offers small items that you can engrave to personalize like keychains, awards, and stainless steel water bottles.

In a survey by Office Depot, 80% of employees believed it was the thought behind a gift that mattered most. This means, as long as your intention is to offer something unique that you believe employees will love, you can’t go wrong with your gift. 

How much should you spend on employee gifts?

The amount you spend on gifts for your employees depends on how many employees you have and your relationship with each. Gifts that are too budget/economical may come across as impersonal or “cheap.” Gifts that are very expensive may inadvertently make employees uncomfortable.  

Typically you want to spend more than $25 per employee but less than $100. An exception to this is for team members you work closely with like an assistant or other management. This price range offers a myriad of quality options that still fall within your company budget. 

Our website makes it easy to shop 100s of branded gifts for your team by product or price range. From kitchen items to health and wellness gear, you’ll find something for everyone in one spot.

Gifts to Avoid 

Avoid gifts that are overly personal like body care products, perfumes, lotions, etc. Gifts that are for an individual employee however may be different. For example, you may want to get a personal or heartfelt gift for a retiring employee, as a wedding gift, or as a baby shower gift. In these circumstances, customized gifts are welcome and more accepted. 

You also want to avoid getting gifts that suit some employees but not others. For example, we carry an assortment of golf-related promotional gifts. All of your employees may not be into golf. In these situations, you should consider gifts that will be beloved by many. Alternatively, you may opt for a gift everyone can use like notebooks, planners, and pens. 

Gift giving is a time to show employees that you value them. You don’t have to spend an arm and a leg to do that but you do want to take price into consideration. If you have a smaller team, you can spend more and offer more personalized touches and consider higher-priced options. For large teams nearing 100+ employees, it’s reasonable to spend less. In those cases, less expensive items with your logo and their name engraved can go a long way to creating a sense of belonging. How much do you spend on employee gifts?

How to grow your tax preparation business

how-to-grow-your-tax-preparation-business

If you’re a tax professional, April is one of your busiest months. According to the IRS, roughly 60% of taxpayers paid for professional help last year. This means that your clients will be on the phone and at your office non-stop until the deadline is reached. However after the buzz of tax season dies down, how do you make sure your business stays top-of-mind with existing and potential clients year round?

You can give excellent advice on managing tax liability and preparing impeccable tax returns but when it comes to promoting your business you could use a hand. Here are some marketing suggestions to help you grow and diversify your practice this year:

Send out a newsletter
Send an informative newsletter every month to all your contacts. Make sure your newsletter includes timely advice for readers. For example, focus on tips related to Christmas bonuses and holiday expenses in December. If you operate in a small community make sure to include information about local events and triumphs in addition to tax advice.

If you are just starting to build your practice, consider buying a client list of local businesses and include a coupon offering a free consultation. If you are using the mail, you can also send out a small promotional gift such as an imprinted pen or imprinted sticky note pad for a memorable touch.

Give back to the community
Volunteering for a food drive, sponsoring the little league team or organizing an event for your favorite charity are all ways of giving back. When people get to know you as an active member of their community they are more likely to trust you with their business.

Create a referral program
Referral programs take time but produce surprisingly positive results. Offer existing clients money off your services or attractive gifts for every new client they refer to you. Depending on the type of clients you cater to, gift options can range from gift cards to promotional drinkware and promotional apparel.

Become an industry expert
There are many ways of achieving this goal. You can teach a class at the local college or adult night school. You can be a guest speaker for the local chamber of commerce, give an interview about tax related subjects to local radio and TV shows, or even create your own podcast. These type of activities will build your reputation as an expert and give exposure to your practice.

Remember that it’s never too early to start. Don’t wait until tax season has arrived to advertise your services. You want potential clients to have you in their minds before their tax needs arise. Whether it be emails, flyers, professional conferences or appreciation gifts, promoting your business is key to guaranteeing profitability throughout the year.

Help customers avoid stress on tax day

As a small-business owner, you should be finished or at least close to done with your taxes for the year. If you've been keeping accurate records, this can be as simple as plugging in a few numbers and letting a piece of software or an accounting team handle the rest. 

However, your customers and employees might not be as financially savvy as you, and while they probably see tax day as a nuisance at best and a nightmare at worst, small businesses focused on financial planning, investing and wealth accumulation should take tax day as an opportunity to help their customers make it through April 15 in one piece.

It doesn't matter who you are - doing your taxes can be an exercise in frustration.It doesn't matter who you are – doing your taxes can be an exercise in frustration.

Be there to help
One of the unfortunate aspects of tax day for small businesses is the relative lack of in-store traffic . After all, some customers might be so busy combing through their records that the last thing on their minds is your business. That's why you need to leverage promotional giveaways in the months and weeks before tax day to let your customers know that you're there to help if they need it.

Promotional products like the Numero Custom Calculator from Myron can serve as gentle but clear reminders that your business has the expertise to handle even the most disorganized financial records from the past year. Make sure to customize your products with your company's address and phone number so customers can easily reach out at a moment's notice.

"Try to soothe your customers' ragged nerves around tax day with stress-relieving products."

You could also take a different route and try to soothe your customers' ragged nerves around tax day with stress-relieving products like Myron's Moneybags Promotional Stress Reliever. With branding and a short message of inspirational support, this could serve as a bright spot in your customers' harried lives leading up to April 15.

Hold a Tax-Free Day
When your customers wake up April 16, the last thing they want to think about is taxes. When your office opens up that morning, it could be the perfect opportunity to hold a temporary sale where you take care of all taxes on any purchase.

Marketing blog Vertical Response explained that this is a great way not only to get customers' focus back on your business, but also to spur some extra sales traffic after tax day – unless you are making million-dollar sales, the odd dollars and cents from taxes for a day will probably be dwarfed by the sales you actually make to curious customers.

Don't forget social
While many of your customers might be too busy finishing their taxes to worry about social media, Brandsplat explained that just as many people take to Facebook and Twitter to vent about their experiences. If your small business doesn't have a comprehensive social media plan for tax day, it might be time to start one now. Whether it includes future promotions or advice on getting your forms to the government on time, being active on social media during tax day can be the final push that puts your small business on top of your competitors.

3 more tips for stretching a marketing budget

Careful financial management is an important aspect of successfully operating a small business, especially when it comes to marketing efforts. Entrepreneurs must dedicate sufficient resources toward generating brand awareness without hurting their bottom lines. In an effort to save money, 29.3 percent of independent companies won’t increase their marketing budgets in 2013, according to AWeber. The software publisher also found that 68.1 percent of entrepreneurs plan on spending more on advertising this year.

Small business owners don’t have to increase spending to create effective marketing campaigns. Companies can adopt frugal strategies like using the same promotional items for multiple giveaways.  Cost-cutting maneuvers give entrepreneurs the freedom to dedicate more resources to other ventures.

The following three strategies can help small business owners stretch their marketing budgets.

Don’t hire outside help
Some jobs are best left to expert professionals, but independent companies might be hurting themselves by seeking marketing assistance. For instance,  Entrepreneur Magazine reports that enterprises can save thousands of dollars by hiring amateur photographers instead of professionals. Alternatively, many similar tasks can be completed in-house, meaning that owners don’t have to pay for any outside help.

Advertisements and graphics can be created with consumer-level software. Entrepreneurs can design templates for email and print advertisements and then generate custom graphics for new campaigns. The software can also be used for logo design, so that every company can place a recognizable emblem on marketing materials – including unique promotional products.

Partner with other businesses
Teamwork is an essential part of corporate success, and it doesn’t have to be limited to inter-office cooperation. Local companies can combine their marketing efforts to reach the optimal number of consumers, rather than competing for attention.

Multiple businesses can split their advertisements equally and share the costs. For instance, ads in local newspapers can feature three logos instead of one. The strategy can help establishments grow by sharing leads and customers within the group.

Entrepreneur recommends working with businesses that offer similar goods and services. Owners should work within their industries to avoid confusing their clients.

Find ways to combine efforts
Many advertisements are restricted to one medium, which can hamstring their effectiveness. Marketing messages reach more consumers when they can work through multiple channels. The multimedia approach allows small businesses to increase the frequency with which they reach out to consumers.

Small business owners can combine traditional resources with new platforms. For instance, Quick Response (QR) codes can be printed on promotional marketing products to direct consumers to digital content.

3 tips for marketing in a down economy

The economy is slowly inching toward recovery, but many small businesses have yet to feel the positive effects. Entrepreneurs are keeping their eyes on their overhead expenses and bottom lines to avoid financial hardships. Some owners have slashed their marketing budgets in an effort to save money.

Entrepreneur Magazine reports that the frugal strategy isn’t entirely beneficial because it’s important to reach more consumers during tough economic times. Small business owners can find creative ways to spice up their traditional marketing tools to attract budget-conscious customers.

Consider the following tips to boost your marketing efforts during tough financial times.

Be charitable and support a cause
The news source states that charitable acts are cost-effective methods to increase market penetration. Joel Warady, a marketing consultant, said that supporting a cause forges a relationship between businesses and their customers.

“Not only does cause-marketing allow you to connect with customers, but it also allows customers to get some insight into your company’s soul. Then, it becomes less about what you give than it does about why you give,” Warady said to Entrepreneur.

Independent companies can raise awareness for important causes with unique promotional products. For instance, there are promotional key rings designed to resemble awareness ribbons for World AIDS Day. Small businesses can start their cause-marketing efforts in February with American Heart Month.

Offer value
Consumers are worried about their finances and are trying to save money. Entrepreneurs can use special discounts and promotional giveaways to motivate their customers to start spending again. Patrons are more likely to buy merchandise when they’re offered a deal, even if it’s only a couple dollars less than the regular price.

Promotional giveaways allow small business owners to add value to purchases without slashing their prices. Companies can create scales so that customers have to spend certain amounts of money to receive large gifts.

Don’t fix what isn’t broken
The developmental stages of a marketing campaign are the most expensive. While businesses design new advertisements, they aren’t actively reaching out to consumers. The lost time results in diminished brand visibility and fewer customers.

Independent companies should use their marketing materials as long as possible. If consumers are responding to advertisements, then there’s no reason to make any changes. The longer a small business uses one set of marketing messages, the less time and money it has to dedicate to developing new campaigns.

Celebrating Financial Wellness Month

As the economy struggles to reach a sustainable recovery, it’s important that consumers budget appropriately. In that spirit, January is Financial Wellness Month, and financial institutions can distribute unique promotional products to help their customers celebrate and fiscally prepare themselves for 2013.

According to LiveScience, getting out of debt is one of the most common new year’s resolutions. Businesses can assist customers by giving away branded tools that simplify financial planning.

Calculating every expense
Calculators are some of the best promotional marketing products that banks and financial consultants can distribute. Consumers can struggle while going over monthly expenses and tallying their numbers, and some of your customers may not be able to easily to track every penny by themselves. Clients can use branded calculators to track their expenditures and ensure that they aren’t exceeding their monthly budgets.

Calculators also reinforce your company’s visibility. Each time your customers use the electronic giveaways, they’ll be exposed to your logos and develop familiarity with your establishment, which can help you hold onto your clients.

Planning ahead
The most important part of every budget is knowing when money will be spent so funds can be allocated accordingly. Tracking regular spending can be difficult for some consumers, but financial services can distribute branded calendars to help customers schedule all of their recurring expenditures.

A pocket calendar may be the best giveaway for a business client. Small business owners must stay on top of their finances, and small schedules allow entrepreneurs to remember important deadlines and how much they’re paying every day. Promotional wall calendars are more suited for homeowners, as the items can be used as decorations.

Writing it all down
Some consumers turn to financial planners for all of their budgeting needs. Before offering advice, consultants can give their clients promotional pens and notepads to take notes on their discussions. Customers will use the giveaways to write down important information and refer back to it when they’re going over their expenses.

The giveaways have functionality beyond financial planning so your clients will hold onto the branded gifts. For instance, pens and paper can be used for shopping lists during the holidays, so your customers develop brand recognition even when they aren’t focusing on their budgets.

Financial planners should market themselves ahead of “fiscal cliff”

The so-called fiscal cliff, a date in 2013 when tax increases and budget cuts will go into effect, is approaching. The Washington Post recently reported that negotiations between President Obama and the Senate have not been been going well and almost no progress has been be made.

Americans are concerned about how the fiscal cliff will affect them and are turning to financial planners for assistance. These businesses must raise their visibility to capitalize on the increased interest in their services. Promotional giveaways and mailers can help these companies reach out to consumers.

Financial planners can buy mailing lists and send leads items branded with contact information. For instance, a firm could mail local residents small flyers and logo-emblazoned pens. This strategy puts marketings materials directly into consumers’ hands so they’ll develop awareness of a company.

Once leads come in, you can reinforce your relationships by giving away other promotional items like calculators and notepads. These branded gifts can make your new clients feel appreciated so they’ll be more likely to retain your services, which can help you in the long run because it’s more cost-effective to hold onto customers than find new ones.

How promotional items can help payday lenders

As the economy struggles to recover, an increasing number of consumers have begun to take payday loans. The Pew Center on the States recently reported that an average of 12 million Americans take cash advances from short-term lenders annually.

As more borrowers seek their services, financial institutions must raise their visibility. Without a proper marketing campaign, a payday lender may lose potential customers to its competitors. One of the advantages these businesses have is the ability to use promotional giveaways the same way banks and credit unions do.

For regular borrowers
The Pew Center also reported that the average borrower takes eight loans per year. Repeat business is only a good thing if your client returns to your institution. You should find incentives for your loyal customers so that they don’t seek out an another business’ services.

While consumers are attracted to low interest rates, payday lenders can’t reduce their charges without hurting their finances. A rewards program that offers small gifts for repeat business, however, can provide sufficient motivation for borrowers to stay with one financial institution.

Due to their loyalty, regular customers deserve more benefits than new clients, so they should be given larger promotional items as tokens of appreciation. You can give them calculators so they can budget their finances while accounting for their loans or you can give them branded coffee mugs as a nice gesture. These are gifts that wouldn’t necessarily be given to leads, so your patrons may appreciate them more.

For potential clients
With so many people taking payday loans, institutions must reach out to consumers and raise brand awareness. Creating exposure can be difficult, however – especially if a lender isn’t sure how to create a lasting marketing campaign.

Distributing promotional marketing products allows a business to put its advertisements directly into consumers’ hands. Print and broadcast messages can easily be ignored and don’t last long, but tangible gifts are held onto and can raise a pay lender’s visibility in the long run.

Giving every incoming customer a pen is a simple method for increasing your marketing presence without developing an expensive campaign. Instead of advertising to every consumer, you’re only sending information to likely leads who have come in and inquired about your financial services.

Advertising on pens isn’t flashy, but potential borrowers hold onto the items so they won’t forget about your company. Lenders can leave pens around their establishments for anyone to take or have employees personally distribute the branded gifts to every consumer who asks about their loan options.

Credit unions need to stand out from competitors

Customers are dissatisfied with banks and have begun seeking alternative financial services. Citing exponentially increasing fees and rapidly degrading customer service quality, some customers are leaving banks for institutions such as credit unions. According to Credit Union National Association (CUNA), 1.3 million new members joined credit unions during the first half of 2012.

The industry is becoming more competitive as establishments vie for new business. Promotional advertising can help credit unions differentiate themselves from the rest of the sector, so consumers know which institutions offer the best financial services.

Enticing new business
While some banking customers are dissatisfied with their current financial institutions, they may not be aware of alternatives. Promotional giveaways attract consumers who might be on the fence as to whether they should find new ways to save their money. Credit unions can distribute fun gifts to motivate prospective clients to start thinking seriously about leaving their banks.

Consumers appreciate free items, especially if the promotional products are things that can be used regularly. Credit unions can take advantage of their locations to maximize their gifts’ usefulness. For example, if an institution is near a supermarket, it can give away logo tote bags to help carry groceries. Establishments in traditionally rainy areas might consider handing out umbrellas to help attract new business.

Educating potential clients
Credit unions that find leads need to explain their services because not every consumer knows the difference between financial cooperatives and banks. When prospective customers speak with employees, the establishments can educate potential clients while creating marketing presences.

Learning about new fees, rates and guidelines is difficult for some consumers. Credit unions can distribute promotional notepads and pens so leads can take notes during their initial question-and-answer meetings. These functional items prevent potential customers from forgetting important information so credit union workers won’t have to repeat the same messages during follow-up discussions. The gifts’ everyday uses also create brand awareness by putting advertisements in consumers’ hands.

Consumers may bring the gifts when they meet with other credit unions. While customers might not think much about one establishment’s logo as they speak with another, that constant advertising presence can make a difference when people are trying to remember which institution seemed like the better choice.

Credit unions need to take steps to stand apart from their competitors as more consumers leave banks. Creating a marketing presence through promotional items can help these financial services stand out from the rest of their growing industry.

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