The National Directory of Certified Public Accountants

Ask A CPA - Small Business Services

When Are Business Meals And Entertainment Expenses Deductible?

Generally, meal or entertainment expenses will be deductible with certain limitations as long as the meal or entertainment expenses are "directly related to" or "associated with" the active conduct of your trade or business and are not extravagant or lavish under the circumstances. Deductions are generally limited to 50% of the cost. Detailed recordkeeping should be kept to verify the deductions. Some locations considereed as entertainment venues are: nightclubs, cocktail lounges, theaters, golf and athletic clubs, country clubs, and sporting events.

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