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What Are The Rules For
Business Meals & Entertainment?
If you are taking a client or potential client to lunch, dinner or an entertainment
event, the cost may be deductible (at 50%) if:
- The cost is not extravagant, and
- A substantial business discussion takes place before, after or during the
meal or event, and
- You retain records to show the date, place, name of the client, cost, and
the nature of the business discussion.
Also deductible (at 50%) are business meals you eat alone, while out of town on
business. Meals you eat alone within your local area, even if out seeing clients,
are personal and non-deductible.
For further information, see IRS Publication 463.
If you are subject to the Department of Transportation's "hours of service"
limits, you can deduct a higher percentage.
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