In the course of your business you may give gifts to your dealers, distributors, customers, clients, and employees. The cost of business gifts is deductible, within limits. You may deduct only up to $25 per person per year.
If you give a $30 gift to a client, you may deduct $25. If you give a $20 gift to a client, you may deduct $20.
If you are in a combined (federal, self-employment, and state) tax bracket of 30%, you could reduce your taxes up to $300 for every $1,000 of income reduction by deducting the cost of business gifts.