We get a lot of questions about deductible meals/entertainment:
50% Deductible (to business owner) meals:
- Ordinary and Necessary for business
- Not lavish or extravagant
- Taxpayer or employee present at meal
- Provided to customer, consultant or contact
- Separately stated if part of entertainment (dinner was $x, show was $y)
NON-DEDUCTIBLE entertainment:
- Concerts, shows, theater
- Hunting, fishing, golf, sporting events
- Country clubs, bars, athletic clubs, social clubs
- BUT Deductible if part of taxpayer's business (golf for an equipment vendor, concert for a singer, etc.)
100% deductible (to business owner) items:
- Occasional employee benefit expenses (picnic, party, etc.)
- Cost of goods sold
- Made available to general public (snacks, water, etc.) as de minimis
- Advertising expenses (open house, similar events/items)