Meals and entertainment expense

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Meals and entertainment expense

A tax deduction allowed for meals and entertainment expenses incurred in the course of business.

Meals and Entertainment Expense

Money that a business spends in the course of buying meals for or otherwise entertaining a client, customer, or employee. In the United States, one may deduct meals and entertainment expenses from one's taxable income, subject to certain restrictions. In general, one may only deduct up to 50% of meals and entertainment and must be able to prove that one conducted business with the person that one was entertaining.
References in periodicals archive ?
Currently, small businesses can deduct 50 percent of their meals and entertainment expenses from their federal tax filings.
The procedure also contains substantive updates to the list of "high-cost localities" used in the "high-low" substantiation method and to the deductible percentage of business meals and entertainment expenses of certain transportation industry employees.
The Tax Court held that, under applicable revenue procedures, the entire per-diem travel allowance paid by a trucking company to its drivers was subject to the 50% deduction limit on meals and entertainment expenses, because it was computed on the same basis as wages.
Would fully deductible meals and entertainment expenses be reported on Part IV, line 37 and 50 percent deductible meals and entertainment expenses be reported on Part IV, line 11?
This plan would create a tax deduction for spousal and dependent travel, and would boost the tax deduction for business meals and entertainment expenses to 65 percent for businesses with annual incomes of less than $5 million.
One example is the review of a sample of meals and entertainment expenses currently subject to a 50-percent limitation.
In "The High Cost of a Free Lunch," (JofA, June00, page 61) the author says IRC section 274(n)(2) provides several exceptions to the 50% limitation on meals and entertainment expenses.
Federal tax planning for meals and entertainment expenses.
Some tax practitioners have approached TEI members (who work for GST-registered companies involved 100 percent in a commercial activity and eligible for full ITCs) suggesting that the companies may claim 100 percent ITCs instead of 50 percent ITCs on reimbursement of employee food, beverage, and entertainment expenses (hereinafter referred to as meals and entertainment expenses (M&EE)).
Among the more ballyhooed changes made by the Revenue Reconciliation Act of 1993 (RRA) were the limits placed on deductions for travel expenses of spouses and dependents, the denial of deductions for most club dues and the further limits on deductions for business meals and entertainment expenses.
The President's proposal would reduce the deductible portion of the otherwise allowable business meals and entertainment expenses from 80 percent to 50 percent.
Reducing the deductible portion of business meals and entertainment expenses to 50% and disallowing a deduction for club dues are unfair because businesses do not run on a 9-to-5 schedule.