Meals and entertainment expenses

The general rule for deductions related to meals and entertainment expenses is that you can deduct up to 50% of the cost of meals and entertainment, or "an amount that is reasonable in the circumstances, whichever is less.

Allowable expenses include:

• meals eaten with customers
• the cost of tickets for a theatre, concert, or athletic event, or other performance
• the cost of private boxes at sports facilities
• the cost of room rentals to provide entertainment, such as a hospitality suite
• the cost of cruises
• the cost of admissions to fashion shows
• the cost of entertaining guests at clubs (night, athletic, social, and sporting), as well as on vacation and similar trips
• taxes, gratuities, and cover charges are included in entertainment expenses

With respect to the meals and entertainment expenses, the following costs are disallowed:

• costs incurred for use of recreation facilities and club dues
• purchase of season tickets for sporting events (unless satisfactory proof is provided that the tickets are a promotional expense)
• meals claimed while outside a sales territory or on a vacation
• meals taken after a golf game (at the club house)

For detailed information about these expenses, see Food, Beverages, and Entertainment Expenses.

Date modified:

2016-02-04