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Ask the Expert

2009.12.01 | 2009.08.01

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 

Monday, August 17, 2009

Can I deduct more than $500 in non-cash contributions?

Yes, you can deduct more than $500 of non-cash charitable contributions.  However, you need to file a form 8283 - NonCash Charitable Contributions, in addition to Schedule A - Itemized Deductions.  The purpose of this form is to report detailed information about the charities receiving the donations. (i.e. name of charity, address, type of goods donated, and the FMV of the donation.) The total amount of donations reported on this form will carry to line 17 of the 1040 Schedule A.

Keep in mind that you can not claim a deduction for clothing or household items you donate after August 17, 2006, unless the items are in good used condition or better.

Below are two links to help you with your noncash charitable contributions. 

If you still have questions, please contact us at 
4:44 pm edt 

Link to web log's RSS file

Goodwill Valuation

Instructions to Form 8283

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