As we approach the holiday season, we wanted to make you aware of the IRS rules for gifts to employee, business associates, and referral sources. A little known rule is that business gifts are limited to $25 per person, per year. Yes, that’s a low amount! This limit has not been updated by the IRS since 1954. So what do you do when you wish to give gifts of more than $25?
A little unknown rule is that business gifts, to individuals, are limited to $25 per person, per year. Yes, that’s a low amount, and it’s not adjusted for inflation. (This limit has not been updated since 1954.) Business gifts to individuals in excess of $25 are non-deductible. Here are a few things to consider:
The rules around this area are complex. If you need help with these rules, please let us know and we can walk you through it.
Have a happy holiday season!