Ravi
Diamond Member
It doesn't really matter. What ever you pay out to your employees is a business expense and fully deductible.You can write off bonuses.This always annoyed me. Instead of throwing a $20,000 Christmas Party, how about just giving people bonuses? Or even family picnics and/or other "expenses".
I'm sure there must be some sort of "tax" reason for it (e.g. a party is a pure business expense to write off vs. having to pay taxes on payroll) - but seriously.... it's not THAT much money, and people would be much happier to get the cash!
Another good reason to have the tax code changed.
But you have to pay taxes on wages that you don't on just a normal business expense, right?
There has to be a reason they are stingy about giving folks $.