Question:
Dear Tax Talk,
What entertainment expenses are tax deductible? If I give customers or employees tickets for sporting events, can I deduct these costs?
-- Monica
Answer:
Dear Monica,
Business-related entertainment expenses are tax-deductible expenses. Entertainment includes any activity generally considered to provide entertainment, amusement or recreation, and includes meals provided to a customer or client. In general, you can deduct only 50 percent of your business-related meal and entertainment expenses.
The 50 percent limit applies to business meals or entertainment expenses you have while:
* Traveling away from home (whether eating alone or with others) on business,
* Entertaining customers at your place of business, a restaurant or other location, or
* Attending a business convention or reception, business meeting or business luncheon at a club.
If employees travel for business, the costs of their meals, whether per diem or actual, are only 50 percent deductible. Although the costs of travel to a convention or conference are fully deductible, the meals while attending are only 50 percent deductible. If meals are provided as part of the conference and not separately stated, the full cost of the conference or convention is deductible.
