Small Business - Can I expense small gifts to myself as a reward (i.e. gift card)
<p>I recently asked if I could <a href="https://law.stackexchange.com/questions/4599/can-i-expense-a-trip-to-a-coffee-shop-small-business-owner">expense Starbucks trips that I make to buy myself a coffee</a>. This has become frequent due to the long hours I'm putting in.</p>

<p>Since I cannot expense coffee trips that I take by myself, can I have my business buy <em>me</em> a Starbucks gift card as a reward for the long hours I'm putting in, and have it expensed? Can I also do this for future employees?</p>

<p><em>Business type: Single Member LLC</em></p>

<p>The IRS rules on deductibility of business gifts are in <a href="https://www.irs.gov/publications/p463/ch03.html" rel="nofollow">Pub 463</a>.  Deductibility of business gifts "for the eventual personal use or benefit of a particular person or a limited class of people" is limited to $25 per person per year.</p>

<p><a href="http://www.nolo.com/legal-encyclopedia/question-deduct-employee-gift-cost-28066.html" rel="nofollow">Furthermore</a>, </p>

<blockquote>
  <p>Cash &ndash; or cash equivalents, such as gift certificates &ndash; are looked
  at differently through the tax authorities' eyes.... You must
  treat such gifts as additional compensation, no matter what the
  amount. These gifts are subject to withholding.</p>
</blockquote>

<p>I wouldn't be surprised if there were a restriction on giving gifts to yourself, but since you're talking about a maximum tax benefit of single-digit dollars per year I don't consider it likely to make a material difference whether you claim it or not.</p>

tax-law