How Can I Deduct 100% of Business Meals and Entertainment?

Reading Time: 2 minutes

The majority of the time meals and entertainment deduction are limited to 50% of the cost, but did you know that meals and entertainment can also be deducted at 100% of cost?

Like many IRS laws that have an exception to the exception and to the exception; Yes there are many exceptions, Uncle Sam has allowed us to keep some of our hard earned money. The answer to the question is; under the right circumstances, business meals and entertainment can be 100% deductible. Here is a list of situations in which meals and entertainment are 100% deductible:

Office parties: Meals provided solely for employees at office parties are 100% deductible. Anything from company picnics, banquets, holiday parties, or any other party for employees falls under this category. However, companies with no employees, like two-person partnerships or one who is self-employed do not fall under the 100% deductible category, and can only claim 50%.

Refreshments for the Office: Any snacks or refreshments provided for the employees in a company office are 100% deductible.

Office Lunches: If there is a valid business reason for providing lunch or meals at the office for the employees, it is 100% deductible. Valid reasons for providing meals include: increasing productivity, giving incentive for employees to work late, meals provided at work meetings, etc. These must include more than half the employees.

akif cpa

Charity Sporting Events: This is a very specific event in which meals are 100% deductible. Volunteers must put on the event, and the proceeds must go to a 501(c)3 charity. Any meals served at this type of event are 100% deductible.

Business Event at Home: If a business event is hosted at the employer’s home for employees or prospects, the meals served here are 100% deductible. It is important to document the reason for the event, and make a list of attendees.

Gifts: It is wiser to give entertainment such as tickets as gifts rather than deducting them as a 50% entertainment deduction. Entertainment gifts are 100% deductible with the limit of $25.

Public Meals: meals or snacks provided to the general public are 100% deductible. An example would be open houses, or sponsoring a booth or table at a public place to promote the business.

Client Reimbursement: If you bill your client separately for meals and entertainment and receive reimbursement for the cost, then you can deduct 100% of the expenses. Your client is the one that is stuck with 50% deduction.

Of course, without a business purpose no meal can be deducted. A good rule of thumb to remember is to document every meal and entertainment purchase, as well as the reasons behind those purchases. It is also wise to keep the proof, such as receipts, of the meals and entertainment. Why get stuck with the 50% deductible when you can have the 100%?


Need assistance setting up quickbooks for deduction or have any other questions? Please contact us at info@akifcpa.com or call us at 713-451-9700.

Also read IRS Audit of Mileage Deduction

Facebook
Twitter
LinkedIn
Sign Up For Our Weekly Newsletter
*Email
AKIF CPA
5.0
Based on 107 reviews
powered by Google
Annie Phillips
Annie Phillips
12:35 10 Oct 21
Turn around time was amazing on the project I needed done. When you don’t understand all the different forms communication is key and you will get that here. They are there to explain what and why you need it.
Meru Kapadia
Meru Kapadia
23:33 01 Oct 21
I usually don't write reviews much as everyone has different experiences, but definitely wanted to share the positive experience I have had here and why I would recommend them to all my family, friends and co-workers.I got a referral for here from a friend, so thought of giving them a try over my old CPA firm. I have been going here for a couple years now and have to say they are top notch. They are always responsive and willing to work with me even when I am delayed. I generally like to ask a lot of questions and not once did I feel like they were annoyed by it and would very thoroughly and positively answer all my concerns with detail explanations. Even during the pandemic, they worked with me 100% virtual and it was seamless. Overall, I am very happy with this firm and will continue with them for the foreseeable future.
Kevan Shah
Kevan Shah
21:45 01 Oct 21
I’ve been going to them for 3 years now for multiple of my businesses. I changed to them after I had problems with my previous CPA firm and I’m so glad I did! Best decision I ever made for my businesses. They have saved me thousands of dollars over the years as well as deal with my immensely complicated tax filling issues. No matter when I call, they always help answer all my questions (and trust me I have a lot) and put my mind at ease on all my concerns. I feel as if I am family the way they take care of me. The quality of their work has not changed; very consistent and professional. It is an understatement when I say I highly recommend them.
Maunil Shah
Maunil Shah
16:19 01 Oct 21
AKIF CPA is the best place for your tax needs! Saim has been easily available for my all my questions and concerns. Couldn’t ask for a better firm that provides excellent service and a familiarity with their clients. I always recommend family and friends to AKIF CPA!!
Shah Hussain
Shah Hussain
03:58 01 Oct 21
Hello AKIF CPA,I wanted to share my experience with you, your team and whomever may be reading this message. My most humble thanks to you and your team for a being such great part of my success.You have done a fabulous job for us this year, and since you took over our books (during our most devastating times) you have literally taken weight off of our shoulders.Thanks for bringing everything up to date and also providing us with numbers or as you call it consultations, ahead of time so we could seal the holes.Great work!!!Shah H.
Sumit Dalwadi
Sumit Dalwadi
04:57 30 Sep 21
The professionals at Akif have been absolutely amazing! Quick to answer all the questions I had and always available to offer their guidance.
Calvin R
Calvin R
20:21 29 Sep 21
I recommend these guys! I will be going back next year. They made everything simple and we understood what was happening. There we issues with our taxes due to our previous accountant and these guys fixed everything. They answered our questions and service was always with a smile.
Ammoria Daniels
Ammoria Daniels
02:11 16 Sep 21
We contacted Akif with an urgent matter regarding corporate taxes. Akif immediately understood what was needed and within days had everything ready to sign. The level of service we received was amazing and unmatched. Waqar expertise in trucking industry made our situation seamless. His communication was outstanding; I heard from him daily and could have been completed sooner if I was as fast as he was 😃 Highly recommended!
Joe Paneitz
Joe Paneitz
18:30 18 Aug 21
What an absolute pleasure to work with this CPA firm. My business is already seeing such a positive impact and growth. I cannot believe I didn't connect with them sooner. This firm is helping in so many ways! 5 stars is an understatement! Thank you so much for your help AKIF CPA
Helptest ARCpoint Labs
Helptest ARCpoint Labs
15:02 18 Aug 21
The firm is quick, responsive, and has the latest technological software. Thus far, I have been with them for 3+ years and will continue to work with them even after relocating. They make it easy even when I'm miles away. Would highly recommend them.
Luz Tipaz
Luz Tipaz
16:06 13 Jul 21
Saim and his team are the best CPAs in town. I have been their client for years. All started when I needed help with company structure with multiple companies and then accounting and Taxes. I have been very happy ever since. Thank you AKIF CPA.
Maria perez
Maria perez
18:31 08 Jun 21
Me and my husband have been getting all of our personal Taxes, business Taxes, monthly bookkeeping, accounting and payroll done with AKIF CPA. Recently, we had more stuff come up and had detailed analysis done on capital gains, single family rentals (SFR) and business disposition. You will only know how great this CPA company is until you have worked with them and given them a chance. Words can’t describe our experience. AKIF CPA gets the job done every time - very reliable, professional and affordable.
Afnaan Amin
Afnaan Amin
22:14 02 Jun 21
Very good experience, we had unique situation in regards to cross border income as Canadians currently residing in the US. Income on both sides of the border through completely different channels. Everything was very easy and completed timely, I also had lots of random questions and Mohammad provided top notch service along the way and even after we finished our taxes!! Highly recommended.
Ryan Paton
Ryan Paton
10:56 08 May 21
I moved to the USA from Canada late 2018 as part of a promotion/relocation for work. For my 2019 returns, I used an accounting firm recommended by the local Canadian social club in my city, which was a terrible experience. They were slow to respond to inquiries and would follow up in piecemeal requests which dragged out my return process over several months, often asking for information I had already provided.For the price I paid, I vowed to find better service. I found Mohammad online and decided to reach out. Mohammad was extremely responsive, took care of my US and Canadian returns as well as my wife's business returns in a timely manner. Overall, it was a very positive experience and I would recommend him to another in my situation.
Tuan Vo
Tuan Vo
01:59 20 Apr 21
I relocated to Texas from Alberta, Canada and needed a CPA to help me with my cross-border taxes as I was not happy with the CPA that I used previously. During my interviewing process to find another CPA, I had good feedback from Mohammad as he was able to answer my questions regarding my unique tax situation with expertise, and importantly to me, in a timely manner. I decided to use his services for the current tax year and I have nothing but compliments for the work Mohammad provided. If you are in need of a professional cross-border CPA, I highly recommend reaching out to Mohammad Akif.
See All Reviews
js_loader
Archives

Crypto Tax & Accounting Newsletter Signup

*Email

Cross-Border Tax Newsletter Signup

*Email