Entertainment Expenses

Entertainment Expenses

Such expenses are deductible by employees and self-employed taxpayers only if the expenses are directly related to or associated with a trade, business, or profession. To prevent abuses, strict substantiation requirements must be satisfied in order to deduct entertainment expenses. The deduction for qualified business entertainment is generally limited to 50 percent of cost.
References in periodicals archive ?
Contemporaneous, written evidence is critical to ensure a deduction for entertainment expenses, unless taxpayers are willing to go the expensive litigation route to prove their case.
The former deputy branch chief diverted the money to customer loans and entertainment expenses. To make up for the losses, such acts of embezzlement were done repeatedly, according to the bank.
CPAs and personal financial planners can enter this Web site through the back door to read guidance for clients on maximizing tax deductions such as travel and entertainment expenses and charitable contributions.
One example is the review of a sample of meals and entertainment expenses currently subject to a 50-percent limitation.
As for philanthropic and entertainment expenses among group firms, Keidanren said they should continue to be reported as group losses, as under the current
In that case, the court found that the taxpayer "routinely" paid for certain expenses (principally, travel and entertainment expenses), deemed ordinary and necessary business expenses to the partnership, from his own funds.
In comparison to entertainment expenses, companies have increased spending on donations.
The National Personnel Authority on Wednesday released a report documenting gifts, rewards and entertainment expenses worth 5,000 yen or more that were reported by senior government officials in fiscal 2000, over half of which were reported by Foreign Ministry officials.
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. Among the exceptions listed are "expenses directly related to the business meetings of employees, stockholders or directors." I am unable to find this exception explicitly noted in section 274(n)(2).
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)).
QUESTION: What can I do to keep better track of my travel and entertainment expenses?
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.

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