I guess I will talk about business gifts again. This is always a hot topic and a few acquaintances were asking the other day.
You can only deduct $25 for business gifts per year per giftee; if you have a separate business relationship with both husband and wife, you can gift them each $25.
You are probably wondering why such a low amount. Well, the law hasn’t changed since 1962, when a car cost $2000 and gas was around 30 cents a gallon. Our friends in Washington have dropped the ball again.
Keep your gifts small (gift cards work well for a single gift each year). If you have to send a more expensive gift, keep the $25 limit in mind and figure the rest is just business goodwill – nondeductible of course.