You can provide the following items to employees without adding to their W-2s:
1.Coffee, doughnuts, soft drinks or similar items.
2. Occasional meals provided to an employee working overtime.
3. Occasional parties or picnics for employees and their guests like the office Christmas party.
The IRS calls these items a de minimis benefit and allows you to deduct their full cost instead of the normal 50% for business meals and entertainment. It is the best of both worlds, a full tax deduction for you and no compensation for the employee.
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