In Actor Speak
The most important thing to remember is the limitation on gifts is $25 per person, per year. That doesn't limit you to one person per year, and it doesn't mean you can only spend $25 dollars on a gift. But it does limit the amount you can write off for each person per year to $25 per year regardless of how much you may have spent on the gift.
Admittedly this is extremely limiting as most worthwhile gifts, even a decent floral arrangement for a casting director, exceeds that amount, but that is the limitation which has been established by Congress and enforced by the IRS for at least the last 20 years.
You are certainly allowed to spend more, and if the role or opportunity you are thanking someone for is worthwhile, we are not suggesting you should consider going cheap just because the IRS says you can't legally deduct any more for one person. If you have a reason to consider giving someone more than one gift in a year please, feel free to do so. Saying "Thank you" goes a long way.
Just be aware that when you give someone a gift, say your agent or a casting director, these are the limitations you have to consider if you are ever audited.
However if, by chance, you were to address the gift to the entire casting OFFICE and if also, by chance, there were numerous people in the office, then you would be entitled to write off $25 for EACH person in the office. The same would be true for your agent who might be at a large AGENCY with numerous fellow agents and assistants in the office.
So keep this in mind whenever you send a gift. And when you decide on the kind of gift you are sending, you might consider that it would be hard to argue that a gift certificate to a restaurant was for the entire office, whereas a gift certificate for a delicatessen with a delivery service might be more usable in this regard.
Perhaps the most important thing to remember was a statement I once heard from a casting director. She said, "Everybody likes to hear 'Thank You'". And she's right.
Saying "Thank You" properly is ultimately more important than worrying about the write off. |
In the Words of the IRS:
"Generally, taxpayers in the entertainment industry may be entitled to deduct expenses for business meals, entertainment, and gifts. Once the expense has been shown to be ordinary and necessary, in the taxpayer's business, the specific record keeping requirements
must be met."
Gifts
Taxpayers must show that the gift was ordinary and necessary to their profession. Taxpayers must further show the following elements:
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Cost of the gift
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Date of the gift
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Description of the gift
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Business purpose or reason for the gift, or nature of business benefit expected to be derived as a result of the gift.
Occupation or other information relating to the recipient of the gift, including name, title, or other description sufficient to establish a business relationship to the taxpayer. In addition to the elements to be proved, the law limits the deduction to $25 per person per year. This limit does not apply to any item for general distribution which costs less than $4 and has the giver's name imprinted on it.
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