Tax question: Cash to employees?
If you give her employees cash (out of pocket) can you deduct that bonus as a "gift" on your taxes? The company is a non-profit.
Also, if I do that, do my employees need to claim their bonus on their taxes?
Answers & Comments
Verified answer
If you give them a cash bonus, you must deduct tax from it and include it on their W-2 - you must treat it as taxable wages, not a gift. So yes they have to claim it.
you are stating 'employees'
anything you pay employees is taxable to them
if they are employee you should be paying them as such and paying the employer taxes, or your non profit could get in the world of trouble
It would not be a "gift". It would be compensation for services and fully taxable to the employees.
You need to run this through payroll.