Is client gift tax deduction a business expense?
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The IRS allows a deduction for business gifts up to $25 per recipient per year. This means if you give a gift to a client or business associate, you can only deduct up to $25 of the cost of that gift. If the gift exceeds $25, the excess amount is not deductible. For example, if you give a client a $50 gift, only $25 is deductible. Incidental costs such as engraving, packaging, or mailing are not included in the $25 limit if they do not add substantial value to the gift.