Business gift deductions

[grizz2]

Do you enter the entire gift amount or just $25 (the max deduction for that gift)? For example, if a gift costs $72, do you enter $72 or do you enter $25? Also, if the gift is for a couple, is the deduction doubled (i.e., $50)? Thanks in advance!

[AnnetteB6]

You can deduct no more than $25 per gift per person given during the year.  So, in your case, you could deduct $25 if a single gift was given to the couple or $50 if a gift was given to each person.  

For more information, take a look at the following from the IRS:

Are business gifts deductible?
 

[grizz2]

Does TurboTax do the calculating for you; that is, will it take the $72 and calculate the deduction or does the user enter $25? 

[DianeW777]

No, you should calculate the allowed gift amount and then enter the correct figure in TurboTax.  It's a detailed calculation when several people or businesses could be involved with receiving gifts.  These expenses would be listed under 'Other Miscellaneous Expenses.

@grizz2 

[jfourn37]

I had a question about how this is added as well. I put together gifts throughout the year that contained all the same products at different times and kept track of the people that I gave them to. My question is when it comes to adding them to the expense do I have to itemize every gift that I have given, or can I combine them and state what the products were and how many people they were for and the total combined amount? For example "Skin Care Sample Bundle for 10 different individuals" then list the total cost being $200 as that would be under $25 per person? I just want to make sure that I enter it correctly, but also don't want to enter everything individually if it isn't necessary. 

[TomK2023]

You may add up all of your business gifts given and enter the total as "Other expenses (from line 48)", subject to the $25 per person IRS rule.

For example: you give away 10 gifts that cost yon $40 per person.  The total expense will be $400 ($40 x 10), but you may only enter the $25 per person total of $250 ($25 x 10) on your tax return as an "Other expense."

In Section V of your Schedule C form, you will need to list the description and amount of each gift.  Be sure to keep all of your receipts for such gifts in case the IRS should ever ask for proof.  See example image below.

IRS website: Are business gifts deductible?