If you give business gifts in the course of your trade or business, you can deduct all or part of the costs subject to the following limitations:

• You deduct no more than $25 of the cost of business gifts you give directly or indirectly to each person during your tax year.
  • If you and your spouse both give gifts to the same person, both of you are treated as one taxpayer.
  • Incidental costs such as engraving, packing or shipping aren't included in the $25 limit if they don't add substantial value to the gift.
  • For purposes of the $25 per person limit, don't consider gifts costing $4 or less that have your business name permanently engraved on the item and which you distribute on a regular basis.
• Any item that could be considered either a gift or as entertainment is generally considered entertainment and cannot be deducted.
• You need to have timely kept records that prove the business purpose of the gift as well as the details of the amount spent and date of the gift.