Home | About Us | Services | In the News | Ask the Expert | Links | Referrals | Contact Us | Legal Disclaimer

Ask the Expert

Archive Older

Tuesday, December 8, 2009

Are the Holiday gifts I give to employees and clients considered a business expense?

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 gross wages.

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. 

10:11 pm est 

Archive Older

Goodwill Valuation

Instructions to Form 8283

**3225 Shallowford Rd NE, Suite 900*Marietta, GA 30062* Phone: (770) 841-9301  * CathyW@WrightTaxSolutions.com**