Treat Yourself to Deductible Business Gifts

Posted by Business Gifts at Sunday, March 23. 2008
Categories: $50 and under, $25 and under, Gift Giving Tips
Most business professionals would agree: well-thought out business gifts are a good investment into the client-partner relationship.  Often times, even a little gift can become the small but deciding factor in landing a lucrative account or business deal.  However, business gifts actually have an additional benefit you may not have thought about...

Did you know that most Business Gifts can be deducted against taxable income? 

Now, before you break out your credit card... there are some strict rules you must follow:

The IRS lays out a set limit on the amount you can deduct: $25 per gift.  That being said, in theory, you could offer 50 clients each a gift, as long as you don't claim more than $25 each.  This also doesn't mean multiple gifts to the same person - even if you were to give someone 2 gifts during the year - the total amount being deducted can only total $25. 

In the case that you weren't planning to give out any gifts this year, remember that a few small gifts could be a nice write-off.  Even an inexpensive fruit basket to celebrate an anniversary or a small bouquet of flowers to remember someone's birthday are a little "treat" that can result in a good impression and bring a smile to your client's face.  Why not feel good about it too?

Additional TAX FACTS to keep in mind:

Deductible Amount Limitations:
 - Does not include "Incidental Costs" including:
        -packaging
        -shipping & handling
        -insurance
        -personalization fees
 - Exceptions on eligible gifts:
        -items $4 or less and 
                - has the business name imprinted
                - is widely distributed (i.e. pens, bags, etc.)
        -signs, display racks, etc.

Other Limitations:
 - You and your spouse are treated as one taxpayer, therefore the $25 total applies to you as if you are one.
 - Gifts given to a member of a customer's family are typically treated as one*

*To read more about this topic, visit the official IRS Website.

 
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