How to Deduct Entertainment and Meals on Your Taxes

Share On Facebook

Deducting entertainment and meals is often a gray area that people take advantage of. My general rule of thumb is that as long as you don’t abuse the tax code, you should be fine. I use what I call the “bullshit” code. If I can tell my wife with a straight face that a particular expense was used for business purposes, and my wife doesn’t think its BS, its usually good enough for me.

Officially though, anything you expense must obey the following rules.

  1. The entertainment expense must be reasonable and accepted in your field of business – For example, if I’m selling vegetarian food over the internet, it most likely wouldn’t fly if I took the employees out for a steak dinner. In any case, you get the point.
  2. The purpose of the entertainment expense must be to bring in revenue – For example, if you are hosting an event to promote your company, this is perfectly acceptable. Even if you and your business partner go out to eat to discuss the business, your meal can be deducted as well.
  3. The expense can’t be extravagant – Basically, this means don’t abuse this deduction!

Anyways, entertainment is defined as any activity or recreation that directly for customers, clients or employees. Only 50% of entertainment and meals is deductible but these expenses can add up over the course of the year. For our store, my wife and I go out at least once every few weeks to discuss new ways to expand the business.

Learn other ways on how to save on your tax return

Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

Share On Facebook
Note: This post above may contain affiliate links, which means that I may receive a commission if you make a purchase when clicking a link. Please consult our privacy policy for more information.

Similar Posts

Have you read these?

One thought on “How to Deduct Entertainment and Meals on Your Taxes”

Leave a Reply

Your email address will not be published. Required fields are marked *