Q&A of the Week September 18, 2024

Question

How can I deduct the costs of hosting events or parties as a small business?

Answer

Suppose you host a party or event that includes discussing business matters (like networking, brainstorming, or meetings). In that case, you might be able to deduct a portion of the expenses under the "meals and entertainment" category. 💼

For example, if you throw a holiday party for employees or clients and mix in some business talk, a portion of the food, drinks, and entertainment expenses may be deductible. Just make sure to document the business purpose!🥳

Meals and Entertainment Deduction: Under the IRS rules, businesses can typically deduct 50% of meals that are directly related to the active conduct of business. However, for events like company holiday parties or events solely for employees, 100% of the costs may be deductible. 📈

• Source: IRS Publication 463 (Travel, Gift, and Car Expenses)