You can give gifts to your business employees and deduct them up to $25 each year per employee. This is an area in which you have to carefully review the Internal Revenue Service (IRS) rules. If you give an employee tickets to a concert or a sporting event, for example, it could, in the eyes of the IRS, be classified as an entertainment expenses instead of a gift.
If the gift is classified as an entertainment expense, it is not subject to the $25 rule. Instead, 50% of the cost of the ticket is deductible.
Keep your receipt along with documentation regarding the purpose for which you gave the gift to the employee so you can document, to the IRS if necessary, whether the gift was actually a gift or an entertainment expense. If you go to the concert or sporting event with the recipient of the "gift," then it is not classified as a gift in the eyes of the IRS. It is then classified as an entertainment expense.
