The IRS states that incremental costs like engraving, gift wrapping and postage are not included in the maximum and are deductible over and above the $25 gift limit.īranded promotional items that are distributed widely throughout the year, cost less than $4 per item, and have your company’s name or logo printed on the gift do not count toward the $25 maximum. If your gift is sent to an entire company, like a fruit or snack basket sent to a client or partner organization, the company-wide gift would be considered deductible in any amount, as long as it’s reasonable. Sending gifts to groups may have different tax rules to consider. You can spend whatever you like on gifts but can only claim up to the $25 maximum for each individual.
The Internal Revenue Service (IRS) allows a maximum of $25 deduction for each person you’re sending a gift to during the tax year. Sending holiday gifts to clients or customers is considered a tax-deductible expense, but there is a limit on how much you can deduct. Below, we will lay out some examples of how tax-deductible holiday business gifts work. With tax season right around the corner, you may find that your holiday business gifts open a new opportunity for a tax write-off. I’m curious if those gifts are tax deductible?Ī: It’s common for businesses to end the year on a great note by providing gifts to their employees and clients, showing their appreciation and spreading some holiday cheer. Question: We’re planning to give holiday gifts to our employees and clients.
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