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Tea & Tax Talk

Are Client Gifts a Business Expense?

Tis’ the season to be gift giving!

As a small business, it's common to give gifts to your clients and/or vendors to show your gratitude and appreciation. It's also common to send your accounting team a little thank you gift because they like presents too ;-)

Giving gifts is a simple way to stay in touch and manage your relationship with your clients. Yes, you can declare gifts as a business expense, however there are some stipulations that will impact how much of a deduction you're eligible for.

🎁 You can deduct NO MORE THAN $25 of the cost of the business gift to any 1 individual per tax year. You can give multiple gifts to the same person. However, you can only deduct $25 in total regardless of the number of gifts.

🎁 If you gift an office of multiple people a gift that can be shared, the value is based on the number of people. For example, if you send a holiday basket to an office of 8, then the gift's value can be up to $200 ($25 per person, for 8 people). This is why it's important to note who the gift is for, when sharing this info with your accountant.

🎁 Gifts that cost $4 or less that have your business name on them are not deductible. This includes items like stationery and pens.

🎁 Any item that considered as either a gift or entertainment is considered entertainment and cannot be deducted. This includes ‘experiences’ such as tickets for concerts and sporting events.

Fun Fact: This year, ASE Group purchased 100% of our client gifts... from our woman-owned business clients! It's the ultimate giving experience. We're giving back to some of the best women-owned businesses we know, while sharing their products with our other amazing clients.

1. Queen Majesty Hot Sauce - Two Ounce Trinity

2. SheCasso by Whitney - Lavender Libations Candle

3. Slim Spirit Wickz - Fall In Love Candle

4. Busy Bee Co. - Cocoa Cup & Aloe There Scrub

Have a question about client gifts? Send us a DM!

Happy Holidays! From our team, to yours.


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