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Tax-Saving Ways to Splurge On Employees

  • 24 June 2014
  • Author: Cari Holbrook
  • Number of views: 3163
Tax-Saving Ways to Splurge On Employees

It’s often hard to compete with big business on salary and employee benefits when it comes to attracting great employees. But make no mistake: The quality of life one can receive working at a family-owned business is a bankable benefit. In fact, think creatively and you may come up with some unique “perks” that also happen to come with great tax savings to you or your employees. Here are some examples:

Childcare – The IRS currently offers an employee-provided childcare facilities and services credit. The credit is 25 percent of the qualified childcare facility expenditures plus 10 percent of the qualified childcare resource and referral expenditures, up to $150,000 per tax year. So if a high number of your employees use childcare services, providing them onsite or finding  resources near your business—and including the cost as a benefit—may be worth investigating.  

Professional Development – The young Millennial generation has gotten flack as being “restless” and even “entitled.” But understanding how to keep them happy in their jobs is important: They’re fast becoming the majority in the workforce. Among other fascinating insights, Deloitte has found that Millennials (also known as Gen Y) highly value development opportunities and are eager to advance. Take advantage of this opportunity by re-evaluating your professional development and training program. To help, the IRS offers tax benefits for job-related training and educational assistance.

Cafeteria Plans – This is perhaps the king of all tax-related benefits.  What you may already know is that cafeteria plans allow employees to choose to receive pre-taxed dollars to use on certain expenses. What you may not know: Those expenses can be custom-defined by the employer. Certainly many employee health-related and childcare costs can be included.  But so can lesser-known expenses such as adoption assistance, life insurance, dental, and perhaps even services like counseling, acupuncture, gym memberships, and even some legal services.

Oftentimes, an HR consultant along with your tax consultant can help you create the most advantageous benefits package—serving the best interests of both you and your employees.

Image Copyright: ruivalesousa / 123RF Stock Photo

Categories: Blog, General
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