Successful companies and those looking to grow their brand recognition assign a considerable budget pool for corporate gifts and employee appreciation gifts. But how are these expenses deductible when it comes to tax? We are here today to share some tips about corporate gift deductions and inform you how you can get a tax break when giving business gifts.
According to IRS regulation, Publication 463 (2021), Travel, Gift, and Car Expenses | Internal Revenue Service (irs.gov), "You can deduct no more than $25 for business gifts you give directly or indirectly to each person during your tax year." This means that if you are gifting your clients a gift card, an event ticket, or a generic gift basket, you can only deduct $25 per gift per client annually. Hence, gifting gift cards is not in your best interest, neither financially nor from a brand recognition standpoint. You will not be able to write them off on your taxes because they are considered cash, just in another form. The same goes for tickets for sports events, concerts, or spa vouchers - they are all part of entertainment expenses which can’t be treated as gift deductions.
The amount of allowable deduction however changes dramatically when the gift you give is branded, for example with your company's logo and/or tag line. Branding turns a generic gift into a marketing material, generally allowing the full cost of the expense to be fully deductible.
Here at Mia Bella, we specialize in branded corporate gifts that include full or semi-customized options. We offer personalized products, add your logo options, as well as customized messages and gift tags. We will customize an otherwise generic gift box or corporate gift basket and turn it into perfect marketing material that will make a lasting impression and one you can write-off.
If you want to give corporate gifts qualified for tax relief, consider an add your logo gift. Order a custom gift basket along with your branded “get well soon” card and give it to your sick employee. Surprise your prospect client with a branded gift box during Customer Appreciation Week. Or have a tradition of giving new clients a mug with your logo as a gift.
These small but meaningful tokens of appreciation can include anything from pens, notebooks, and calendars to thermoses and t-shirts. Not only will they be treated as tax-deductible, but they will also be a great option for business advertising that will help you promote your brand, attract more customers and increase the sale rate.
If you are interested in increasing productivity and income, and doing business advertising, giving some incentive corporate gifts is the best way to achieve that. If you still need to figure out what to give your staff members, check out our online store to order one of our creative gift boxes or contact us for concierge gifting service.