Meals & Entertainment Expense Deduction

Many businesses have a difficult time determining which meals & entertainment (M&E) expenses are 50% deductible and 100% deductible. Informing your employees to keep proper documentation in order to prove amount, date and place, the business purpose, and who attended will help with the aforementioned situation. Being able to pin point which types of M&E expenses are 50% vs. 100% deductible will benefit your business once it comes time to pay Uncle Sam. Refer to the chart below, which highlights some of the major M&E expense deductions.

Meals 100% 50%
De minimis meals ordered for staff (those provided to employees for the benefit of the company)
-Meals provided during meeting/training to increase efficiency X
-Meal for employee who worked overtime X
Meals purchase for Board of Directors Meeting X
Employee events which benefit the employees, and do not discriminate in favor of highly compensated employees (holiday parties, team building, etc.) X
Meal with a customer where was discussed X
Business travel meals X
Entertainment 100% 50%
Ticket price, taxes, transportation to/from and parking expense for sporting event/entertainment event which business was discussed X
Travel 100% 50%
Transportation to/from restaurant and sporting/entertainment event which business was discussed X
Transportation and lodging expenses associated with business travel X

 

Always keep in mind that in order to take this deduction, the meal & entertainment expense must be related to/associated with business.

If you have any general or specific questions regarding meal & entertainment expense deductions, please feel free to contact Mike Dempsey, CPA at 314-576-1350 or mdempsey@bwtpcpa.com.

Mike Dempsey, CPA is a Senior Accountant with BWTP P.C. Read more about Mike here.

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