Giving Season and Business Gifts: Are They Deductible?

By
Education & Training with KLSM CPA Firm, PLLC

Depends! In the spirit of the giving season, here are few tips when it comes to business gifts:

  • You can deduct up to $25 per gift per person
  • Gifts that could be considered entertainment are not deductible
  • Keep your business gift receipts!

Here are a few business gift suggestions:

  • Coffee mugs/tumblers
  • Gift baskets
  • Calendars/planners
  • Gift cards: amazon, coffee shops, bookstores, etc.

Please keep these tips in mind as you gift clients during the holiday season! 

 

Feel free to contact us at tax@klsm-cpa.com if you would like tax assistance or have tax related questions.

 

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KLSM CPA Firm PLLC is a local Houston, TX CPA firm that empowers individuals and small businesses by providing accounting and tax solutions for financial success. We also assist our clients with tax resolution matters such as sales tax, payroll and income tax issues in Houston, Tx, San Antonio, TX, Austin, TX and elsewhere. 

Comments (17)

Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

they need to raise that figure....what the heck can you buy for $25???  

Dec 20, 2019 12:32 PM
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Krystin,

Thank you for the clarification and I agree with Barbara Todaro 's comment.  Happy Holidays. A

Dec 20, 2019 12:49 PM
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Krystin Mitchell, CPA CFE  and Ron and Alexandra Seigel  I'd be embarrassed giving a $25 gift to a homeowner who just put $15 to $20k or more in our pockets.... I just eat the gift and forget the write off.... imagine giving a Starbucks gift card after closing on a high end or luxury home.... even a starter home is high $300's in our area....

Dec 20, 2019 12:55 PM
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Krystin and Barbara Todaro our client who sells luxury propeties often gives a 6 pack of Dom Perignon or 6 bottles of a Napa cult wine...A

Dec 20, 2019 12:59 PM
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Ron and Alexandra Seigel and Krystin Mitchell, CPA CFE I had a high end subdivision ( the last one I listed) with 52 homes that ranged from $700k to over $1mill....  every home buyer received a credit for $1,500 to California Closets while the home was under construction.... I deducted it from my commission....the builder paid the closet company with what I deducted....that was 15 years ago and they loved it.... there's more than one way to skin that cat.... and it's legal....

Dec 20, 2019 01:11 PM
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Krystin and Barbara Todaro California closets was the brainchild of Ron's Uncle David who helped one his students in his business class (his second career after he and his brothers sold their furniture company)  conceive the whole business.  Today, it is in the hands of Ron's cousins and no doubt their kids will take over.  They have done very well, the wife of Ron's cousin has a great marketing mind.  I love your idea.  A

Dec 20, 2019 01:19 PM
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Ron and Alexandra Seigel (Alexandra).... the custom home I built and sold 11 years ago had California Closets throughout including the garage for bikes and storage...  I had the best closet designs in every single closet and storage area in the home.... miss it..

Dec 20, 2019 01:25 PM
James Dray
Fathom Realty - Bentonville, AR
Exceptional Agents, Outstanding Results

Morning Krystin.

The gifts I give well exceed 25.00, but the clients remember them 

Dec 21, 2019 01:43 AM
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

Interesting about the entertainment factor.  Too bad though.

Jan 02, 2020 12:19 AM
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thank you very much for sharing this reminder.

Happy New Year!

Jan 02, 2020 09:04 AM
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

I hope you will try the black-eyed peas and mushrooms recipe I posted today. It is one of the best black-eyed peas dishes I can recall. 

Jan 04, 2020 10:07 AM
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thanks for your comment on my recent post.

Have an outstanding January.

Jan 15, 2020 07:20 AM
MichelleCherie Carr Crowe Just Call...408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

This was  news to me, I thought it was OK as long as it stayed under $35.

"Gifts that could be considered entertainment are not deductible."

Jan 17, 2020 07:59 PM
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Your comment on my recent post is much appreciated.

Have a very special weekend.

Jan 24, 2020 09:24 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

I would like this to be increase to at least $50 now.  Not staying up with the increase in items.

 

Jan 27, 2020 10:43 AM
MichelleCherie Carr Crowe Just Call...408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

I'm looking forward to reading your next blog post at ActiveRain.

Jan 27, 2020 01:11 PM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

As a lender, I must be extremely careful regarding the giving of gifts Krystin Mitchell, CPA CFE ... and while I agree with many here that some closings would seem to demand far more than a $25-valued thank you ... that is the ruling I must live by.  Thankfully, my wife (marketing guru) helps me immensely in this regard as she tries to personalize the choice of gift to each individual client.  I think that little bit of extra effort resonates ...

Gene

 
Feb 05, 2020 11:36 AM