Whether your business is the law, or a business with accounting or asset protection needs, our business has been “Solving clients’ problems" since 1977.

Blog

23 January 2018

New Tax Rules Affect How You Attract Top Attorneys with Creative Perks

New Tax Rules Affect How You Attract Top Attorneys with Creative Perks
A recent law firm salary study reveals associate salaries and base pay are increasing in 2018, along with perks like signing bonuses, relocation reimbursement and

other benefits. Even perks like pet insurance and emergency child care—which you may be completely unfamiliar with—are on the list of non-traditional benefits that win big with top legal talent.

Covering relocation expenses is standard for most law firms because more than one in every three attorney placements requires relocation. In the past, covering actual relocation expenses has been a tax-efficient way to offset costs, but the new tax law signed by President Trump on December 22, 2017, eliminates this employee deduction. Relocation bonuses are an alternative and are usually about $5,000 to $10,000 for a newly hired attorney, but these bonuses are a fringe benefit and are treated as taxable income. In light of these changing rules, it’s important to consider whether your relocation perks need a tax-friendly adjustment so that both the new employee and the company come out ahead.

The value of other fringe benefits like dependent care, educational assistance and use of on-premises fitness facilities can be excluded from an employee’s taxable wages if certain rules are followed (rules for 2018 aren’t out yet, 2017 rules are referenced here). However, in many cases, highly compensated employees or those with some ownership of the firm may not be eligible and may need to be treated as partners in the business for tax purposes instead, so plan accordingly. Offering health insurance and life insurance can potentially reduce taxes, too, if administered the right way. And don’t forget de minimis benefits like personal use of company cell phones and copy machines that—when considered—can reduce your tax bill as well.

With competition for top talent high, now may be the time to reimagine your law firm’s compensation packages, especially when considering the new tax laws. Getting creative with perks can not only help you attract the best attorneys, the taxes they could save both the business and your staff can really add up. Contact us for ideas on how to make it happen.

Image Copyright: garagestock / 123RF Stock Photo

Print

Please login or register to post comments.

Name:
Email:
Subject:
Message:
x

Expertise

When you hire Steven Bankler and his team of certified public accountants, you get seasoned, knowledgeable CPAs.

The IAPA International LogoRather than experienced bookkeepers, promising CPAs-in-training or studious interns in the process of completing their accounting degrees, you get professional CPAs. We Solve Problems. We provide creative solutions to our clients’ unique problems including tax and estate planning, forensic accounting, expert witness and litigation support.

Testimonials

Curriculum Vitae

Quoted Opinions

Newsletter Signup

First Name:
Last Name:
E-Mail: