Meals and entertainment expense

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 ?
Would all meals and entertainment expense be reported on Part IV, line 11?
Therefore, items such as federal income taxes, fines, penalties, disallowed interest expense, the disallowed portion of meals and entertainment expense, and similar items probably do not reduce ACE even though they reduce E&P.
Therefore, items such as federal income taxes, political contributions, penalties, disallowed interest expense, the disallowed portion of meals and entertainment expense and similar items do not reduce ACE even though these items reduce E&P.
Q: Can I still deduct business meals and entertainment expenses?
Many business owners, self-employed individuals, and other taxpayers are aware that business meals and entertainment expenses are only 50% deductible.
A business can deduct 50 percent of business-related meals and entertainment expenses. The IRS has no rule on how much of the meal time must include business discussion, but to be deductible, the meals or entertainment must be able to pass the directly related and associated tests, and, of course, business must be on the menu.
The amount identified for the deductible ticket price, along with any food and beverage expense, is deductible subject to the 50% limit generally applicable to meals and entertainment expenses. Any amounts identified as advertising expenses should be fully deductible as ordinary and necessary business expenses.
Increasing the deductibility to 80 percent of business meals and entertainment expenses will aid small business owners who use meals to market goods and services, retain customers and attract new business.
Under the "regular federal per diem rate" method, an employer can deduct its employees' ordinary and necessary business travel, meals and entertainment expenses reimbursed under an accountable plan.
* Meeting with Tax Legislative Counsel and other Treasury and IRS representatives to discuss proposed revenue procedure on statistical sampling in respect of meals and entertainment expenses (7/2/03).
The proposal--a revision of a similar wage package that contained a slightly smaller tax cut provision recently passed by the Senate--would expand a tax credit for employers who hire relatively unskilled workers; provide tax relief for the timber industry; make meals and entertainment expenses 80 percent deductible; make health insurance for the self-employed 100 percent deductible; and repeal excise taxes on liquor, beer, and wine producers and marketers.
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.