Can you write off gift to client tax deductible?
TL;DR
Gifts to clients are generally deductible, but the IRS limits the deduction to $25 per recipient per year. Many people mistakenly believe the entire gift amount is deductible.
Detailed Answer
Where to Put It on the Tax Form
Schedule C, Line 27a
Real World Example
A freelance graphic designer gives a $40 coffee table book to a client as a thank-you gift. Only $25 of this gift is deductible. The designer should keep a record of the gift's cost and the client's name.
Audit Risk & Documentation Tips
Audit risk is moderate due to the potential for abuse. Keep detailed records of each gift, including the recipient's name, the cost of the gift, and the business purpose. Save receipts and any correspondence related to the gift to substantiate the deduction.
IRS Reference
IRS Publication 463, Travel, Gift, and Car Expenses.
Relevant Industries
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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.
Page created on July 18, 2025