A branded gift for a client belongs on Line 27a, other expenses.
Why line 27a
Putting your logo on something does not turn a gift into advertising. If the item goes to one identified client or a small named group, it is a business gift, capped at $25 per recipient per year, itemised in Part V and carried to line 27a. Line 8 covers promotional items handed out broadly, and the gift rules specifically carve out identical items costing $4 or less that carry your name permanently imprinted.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so a branded gift for a client lands on Line 27a without you sorting it.
Start for freeWhat a branded gift for a client is confused with
- Line 8, advertising
- Identical items of $4 or less with your name permanently on them, distributed widely, are advertising on line 8; anything nicer going to a named recipient is a gift subject to the $25 cap.
- Line 24b, deductible meals
- A packaged item you hand over is a gift; a meal you sit through with the client is deductible meals on line 24b at the 50 percent limit.
Examples that belong on line 27a
- A $22 engraved pen set for a closing client
- A $60 gift basket to a referring realtor, deductible up to $25
- A $45 bottle of wine to a landlord who renewed, deductible up to $25
- A $30 branded hoodie for a long-standing client, deductible up to $25
- A $25 coffee shop gift card to a client who sent two referrals
What does not belong here
- Promotional items of $4 or less handed out broadly, which are advertising on line 8
- Engraving, wrapping and shipping, which do not count against the $25 cap and are deducted on top
- A gift to your own family, which is personal
The limit that applies
The business gift deduction is limited to $25 per recipient per year, a figure that has never been indexed. Incidental costs such as engraving, packing and mailing are not counted against the $25.
What to keep
Record the recipient, the business relationship, the cost and the date for every gift. Publication 463 asks for exactly that, and a receipt on its own does not prove who received the item.
Other expenses on line 27a
| Expense | Line |
|---|---|
| a background check | Schedule C, Line 27a |
| a business coach | Schedule C, Line 27a |
| a conference registration fee | Schedule C, Line 27a |
| a hot-desk day pass | Schedule C, Line 27a |
| a payroll service | Schedule C, Line 27a |
| a professional certification renewal | Schedule C, Line 27a |
| a stock photo license | Schedule C, Line 27a |
| a telephone answering service | Schedule C, Line 27a |
| a trade show booth fee | Schedule C, Line 27a |
| a translation service | Schedule C, Line 27a |
| an online course | Schedule C, Line 27a |
| bank fees | Schedule C, Line 27a |
Related lookups
Sources
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so a branded gift for a client lands on Line 27a without you sorting it.
Start for free