Can I deduct client gift tax deduction?

Client gifts are deductible as a business expense, but the IRS imposes a strict limit of $25 per recipient per year. This means if you give a gift worth $50 to a client, you can only deduct $25. The $25 limit includes incidental costs, such as engraving or packaging, unless these costs do not add substantial value to the gift. Gifts to a company that are intended for the use of an individual employee are considered gifts to that employee. However, if a gift is given to a company and is not intended for a specific individual, the $25 limit does not apply. Promotional items with your business name that cost $4 or less, such as pens or calendars, are not subject to the $25 limit.