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I recently asked if I could expense Starbucks trips that I make to buy myself a coffee. This has become frequent due to the long hours I'm putting in.

Since I cannot expense coffee trips that I take by myself, can I have my business buy me 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?

Business type: Single Member LLC

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  • I'm not a CPA, but you can check this IRS publication out. However, it's often said that there are certain deductions that raise the likelihood of getting an audit...
    – Pat W.
    Oct 26, 2015 at 17:59

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The IRS rules on deductibility of business gifts are in Pub 463. 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.

Furthermore,

Cash – or cash equivalents, such as gift certificates – 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.

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.

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