Can I Deduct Client Gifts?

Yes, but only up to $25 per recipient per year. If this number seems low, that is because the gift limit has not changed since 1962.

If you give a client a $100 gift basket, you can only deduct $25. Incidental costs like packaging or engraving that don't add substantial value are excluded from the $25 limit.

Gifts to employees are treated differently. De minimis gifts (low-value items like coffee or holiday cards) are tax-free to the employee and fully deductible by the employer, while larger gifts are taxable compensation.

Keep records of who received each gift and the business purpose.