Can I Deduct Business Gifts Under $25?

The business gift deduction has a very specific dollar limit that trips up many business owners who are generous with their clients. The IRS allows you to deduct up to $25 per recipient per year for business gifts, a limit that was set in 1962 and has never been adjusted for inflation. This means a $100 bottle of wine you send to a client generates only a $25 deduction. Promotional items with your business name on them that cost $4 or less are treated differently and do not count toward the $25 limit. If you give a gift intended for both a business contact and their family members, it still counts as one $25 deduction, not one per family member.