The holiday season is the perfect time to show your clients and employees just how much you appreciate them. However, figuring out what to give, when to give it, and what’s tax deductible can be a daunting task. Vyde’s made it easy with our comprehensive, deductible focused Business Holiday Gift Giving Guide.
Finding a gift that is sincere, useful, meaningful to all clients, and tax deductible sounds like a whopping job. Not to mention sending it out on time, staying within a budget and somehow making it personal. So how can you wrap all of this up in one business holiday gift?
Is a Holiday Business Gift Tax Deductible?
Let’s start with the numbers. What is tax deductible when sending a business holiday gift to a client?
Like so many other tax deductions, there is a limit on how much you can deduct when it comes to gifts. Right now, the limit is $25 per recipient per year.
Perhaps you’re especially generous throughout the year and send your clients many gifts. It’s important to know that only $25 per year per recipient is actually deductible. So, if you sent your favorite client three $25 gifts this year totaling $75…you guessed it, you are only allowed to write off $25 for that client.
How about prepping that fabulous gift and sending it off to clients? Wrapping paper, cards, scissors, tape, ribbons and bows are all tax deductible so fancy it up before shipping it out! And when you get to that mile-long post office line this December, keep your receipts because shipping and stamps are deductible as well. These costs are an addition to the $25 per recipient limit, so the actual gift itself can be valued at $25 and these expenses are still deductible.
If the $25 limit feels restrictive to you, there is a circumstance that can help you deduct more—and probably cut your work in half, too. According to the IRS, if you give a gift of “entertainment,” you can deduct 50% of the cost.
Examples of entertainment gifts are concert tickets, sporting event tickets, movie passes, restaurant gift cards, vacations, hotel stays, etc. Clearly that $25 limit per recipient can quickly be surpassed in these categories, so your deductions may actually be greater than $25 each. Your clients are sure to love the gift of entertainment and you won’t have to bother with the ribbons and bows. In fact, most of this shopping can be done online and sent to your client electronically, so win-win!
FAQs for Vyde’s Business Holiday Gift Giving Guide
1. How can I combine sincerity, usefulness, meaning, and tax deductibility into one business holiday gift?
Finding a gift that ticks all these boxes might seem challenging, but it’s not impossible. Vyde’s comprehensive guide offers suggestions tailored for such occasions, ensuring your gift is thoughtful, practical, and tax-deductible.
2. Is a holiday business gift tax-deductible?
Yes, holiday business gifts can be tax-deductible. However, there are limitations. Currently, the IRS allows a deduction of up to $25 per recipient per year. It’s crucial to stay within this limit to maximize tax benefits.
3. What expenses related to sending out business holiday gifts are tax-deductible?
Several expenses associated with preparing and sending business holiday gifts are tax-deductible. This includes the cost of wrapping paper, cards, shipping, stamps, and other related items. These expenses are separate from the $25 limit per recipient, allowing for additional deductions.
4. How can I exceed the $25 per recipient limit for tax deductions?
One way to surpass the $25 limit is by giving gifts of “entertainment.” According to IRS guidelines, you can deduct 50% of the cost of entertainment gifts, such as concert tickets, restaurant gift cards, or vacations. These gifts often exceed the $25 limit, providing greater deductions while offering clients memorable experiences.
5. Where can I find more ideas for business holiday gift giving?
For additional ideas and tips on business holiday gift giving, explore the comprehensive gift-giving guide provided by Vyde. It covers everything from gift selection to recipient considerations, ensuring your gifts are both meaningful and tax-efficient.
For more ideas on business holiday gift giving, visit the rest of our gift giving guide:
