Are client gifts tax deductible?
Up to $25 per person per year. Wrapping, engraving and shipping don’t count toward the $25.
The rule
Business gifts are capped at $25 per recipient per year, a limit set in 1962 and never raised. A gift to a client’s family counts as a gift to the client.
The cost of wrapping, engraving or shipping it is deductible on top. Small items with your business name printed on them that cost $4 or less, like pens, don’t count as gifts at all.
Tickets you give a client can be treated as a gift, up to $25, or as entertainment, which isn’t deductible.
An $80 gift basket for a client puts $25 on the return.
Priced at 36¢ on the dollar, the rate of a $95,000 sole proprietor in California. Work out yours.
- Where it goes
- Schedule C line 27a, other expenses
- What to keep
- Receipts, and who received each gift.
Checked on September 25, 2026 against Publication 463, Travel, Gift and Car Expenses. An estimate for your records, not tax advice.
By the kind of work
What else each of these can deduct, and what they tend to miss.
See it on every receipt.
Snap it and Reimburse files it on the right Schedule C line, takes the deductible share and shows what it puts back.