Yes, gifts can be considered a business expense. However, limitations apply.
Employee - generally, all gifts
to an employee are considered compensation and must be included in the W-2. Any cash, gift certificates, or similar item that
is easily convertible to cash should be included in the W-2. However, Holiday gifts (i.e. turkey or ham) or other nominal
items (i.e. theater or sporting event tickets) are "de minimis" fringe benefits and not included in the employee's
Non-employees - deductions for business gifts made directly or indirectly to any non-employee individual
are limited to $25 per year. Any value above this is non-deductible. For these purposes gifts to family members/spouses
of a customer are deemed to have been given to the customer. A married couple is considered one taxpayer when looking
at gift limitations.
Please let us know if you have further questions about the gift limitations.