I have a new business. It is an LLC. I have some year end $ left. I want to give gift cards out. Can I?

Question

The business is small, just a few thousand in sales. We have no employees but we have had a few neighbors that have really helped out. I would like to say "thank you" by giving them a small gift card. My real question is can I treat such as an expense and write it off again my yearend profit? I want to do this right. Thanks.

Answer 1

The business tax deduction for "Gifts" is limited to $25 per person.

Answer 2

i dont think you can write that expense off.

if they were employees, or contractors you could write it off because the gift cards would be part of their pay (in the form of a holiday bonus) and you would have to put it on their W2 or 1099 forms.

but now that i think of it, there might be a way to write it off if you can show that gift cards are necessary for you to run your business. if you need these gift cards to get people to volunteer for you (thats a bit of a stretch though). but then again, those gift cards might just be seen as payment and then you'd have to issue your volunteers 1099s to show that you paid them. that's probably a lot more complicated than what you want.

lol, this is turning out to be a bad answer. sorry.

Answer 3

I know I don't have an answer that is appropriate for your question, but I just wanted to tell you that I think it is very commendable you want to do that and I hope you can do it whether or not you find out down the road it is a write-off. Merry Christmas!

Answer 4

GO with VIsa gift cards they are the best b/c you can spend them anywhere Visa is accepted. If you want to say "thank you" it should be about that, when the time comes to it then worry about if you can write it off.

Answer 5

Yes. It's sales promotion.

Answer 6

Yes, advertising, promotion as said before, there are many ways to classify it. Your best bet is to ask your CPA. If you don't have one, you should!

Answer 7

Legally yes, morally no.