Business meals and entertainment that qualify for expenses are 50% deductible. If you spend about $500 a month on qualifying business meals and entertainment, or $6,000 for the year, your deduction will be $3,000.
Entertainment generally includes items such as entertaining at cinemas, country clubs, golf clubs, and sporting events. Deductible meals or entertainment must be either be related to making a client or getting new business, or encouraging the continuation of a business relationship. As a general rule, occasional meals and entertainment with business associates will be deductible.
You must have receipts for the meals and entertainment and must also be able to provide the names of the people you met as well as the purpose of the meal. You must be able to establish the amount spent, the time and place, the business purpose, and the business relationship of the individuals involved.
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