Meals and Entertainment Deductions

Can I write off meals and entertainment as a business expense?

As long as the expense is "ordinary and necessary", yes.

Where do I put the expense if I own a sole proprietorship?

This expense would show up on the Individual Tax return (1040) on 'Profit or Loss From Business' (Schedule C).

What if I do not own my own business?

The expense would be entered on 'Itemized Deductions' on Schedule A. Remember, if you do not itemize, the expense may not benefit you at all. In addition, these expenses are only 50% deductible AND only the portion that exceeds 2% of your Adjusted Gross Income is a deduction (last number on first page of 1040).

What if my business is a separate entity (Partnership, S-Corporation, Corporation)?

Assuming the entity paid the expense, you would put the expense on that particular return.

Are meals and entertainment 100% deductible?

For true meals and entertainment, they are 50% deductible. An example could be you took a client to lunch to talk about business. Most programs will ask for the total and do the calculation for you. Do not rely on the program. Double check the calculation. If you have specific questions, ask a professional.

What if the 'meals and entertainment' happened while I was out of town for a business seminar/trip?

Meals and entertainment in this scenario will also be 50% deductible. When in doubt, ask a CPA firm.

What type of records should I keep?

You should keep the receipt with the total, date, and location. Also, you should keep record of who you met with and the particular business relationship.

Here is a helpful link:

http://www.irs.gov/publications/p463/ch02.html