Today TaxMama hears from Muriel in Tulsa, OK who tells us. “We sent a funeral flower wreath to a work colleague, who not an employee. Is this considered a gift? Can it be a business deduction?”
Dear Muriel,
What a shame to lose someone you clearly like.
For tax purposes, if the business paid for it, it would be a deductible gift. Or if you paid for it personally, you could deduct it as an employee business expense – if you could deduct employee business expenses at all…
But, sadly, gift deductions are limited to $25 per person, per year.
But you can stretch that $25 by recording the cost of the shipping/delivery separately. And if there was any monogramming or anything on a custom ribbon, that would be a separate cost, too.
This is one of those areas of the tax law that need to be updated. This amount has not been changed in at least 25 years. And you know how prices have increased since then.
There are too few viable gifts a business can give anymore that cost $25.00 or less.
I hope this helps…a bit?
And remember, you can find answers to questions about gifts and all kinds of other tax issues, free. Where? Where else? At TaxMama.com
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