Have you missed socializing and having business meals with your prospects, customers, and employees? Also, the holidays are coming up - will a year-end holiday meal to gather employees and their families be tax deductible?
What's Still Deductible?
You may wonder what types of social activities are tax-deductible given recent changes to tax law. As we return to in-person events consistent with appropriate public health recommendations, some activities continue to be tax-deductible. While outings such as baseball and football games with clients and prospects are not, there are plenty of other activities which are.
Taking advantage of all appropriate deductions while exercising care about a legitimate tax write-off is one of the 10 most important secrets of successfully running a small business.
To make sure you're on firm ground, check the table below for what you can do in 2021 and 2022 as the law stands now:
| © 2021 Bradford Tax Institute. Used with permission. |
Amount Deductible for Tax Years 2021-2022 |
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|
Description |
100% |
50% |
Zero |
|
Restaurant meals with clients and prospects |
X |
||
|
Entertainment such as baseball and football games with clients and prospects |
X |
||
|
Employee meals for the convenience of the employer, served by the in-house cafeteria |
X |
||
|
Employee meals for a required business meeting, purchased from a restaurant |
X |
||
|
Meal served at the chamber of commerce meeting held in a hotel meeting room. |
X |
||
|
Meal consumed in a fancy restaurant while in overnight business travel status. |
X |
||
|
Meals cooked by you in your hotel room kitchen while traveling away from home overnight. |
X |
||
|
Year-end party for employees and spouses |
X |
||
|
Golf outing for employees and spouses |
X |
||
|
Year-end party for customers classified as entertainment |
X |
||
|
Meals made on-premises for the general public at a marketing presentation |
X |
||
|
Team-building recreational event for all employees |
X |
||
|
Golf, theater, or football game with your best customer |
X |
||
|
Meal with a prospective customer at the country club following your non-deductible round of golf |
X |
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