Deducting Your Entertainment Costs

How much is it legal to deduct?

Grow Your Business, Not Your Inbox

Stay informed and join our daily newsletter now!
1 min read
Opinions expressed by Entrepreneur contributors are their own.

On the entertainment side, tax law allows you to deduct 50 percent of meals and entertainment expenses that are business-related. To qualify, you must be able to show that the expense directly preceded or followed a substantial, bona fide business discussion or that it's directly related to the active conduct of your trade or business. You must keep good records, which include a receipt for any expenditure of $75 or more. Holiday parties, picnics and other social events you put on for your employees and their families are an exception to the 50 percent rule. Such events are 100-percent deductible.

More from Entrepreneur

Get heaping discounts to books you love delivered straight to your inbox. We’ll feature a different book each week and share exclusive deals you won’t find anywhere else.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Create your business plan in half the time with twice the impact using Entrepreneur's BIZ PLANNING PLUS powered by LivePlan. Try risk free for 60 days.

Latest on Entrepreneur