Canuckbusiness

Start a business, Do your taxes, Save money

How do I write off gifts for clients?

Where do I record gifts for clients on my tax return?

Thanks for e-mailing and asking Jean. I’m sure you’re not the only one wondering this right about now. I have seen gifts put into two categories on the T2125 by small business owners, but there really is only one correct (and by that I mean “advantageous to the business owner”) place to put it.

Meals and Entertainment Expense:
This is the category most often used for entertaining clients. The problem with putting a gift of something like a bottle of wine in here, is that the total of this category is reduced by 50% before being calculated as an expense on the T2125. So for a $20 bottle of wine, you only get a $10 deduction.

Advertising Expense:
This is the best place to put gifts for clients, or people you “hope” will someday be clients. You get a 100% deduction in this category.

What if I don’t have a business but I buy my accountant a bottle of wine for Christmas–can I write it off somewhere?

Nope. But don’t let that stop you 🙂

December 15, 2011 - Posted by | Random Questions, Running Your Business, tax | , , ,

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