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OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®



  Creating and Monitoring Business Systems
Tax Record Keeping
 
Financial Management

Is Your Company Profitable?

Tax Record Keeping

Escrow and Trust Record Keeping

Personnel Management

Compensation Policies

Policies for Real Estate Operations

More Resources


  Tips for Entertainment Expense Deductions

Generally, you can deduct only 50 percent of your business-related entertainment and gift expenses, such as when you’re entertaining a client, traveling away from home on business, or attending a business-related convention or event. However, there are exceptions. You can deduct all of an entertainment expense if:
  • Entertainment or food is offered to the entire community for promotional or advertising purposes
  • Entertainment and food is part of a qualified charitable event.

In addition, if you are self-employed, your meal and entertainment deductions aren’t subject to the 50 percent limit if you meet all of the following requirements:
  • You have these expenses as an independent contractor.
  • Your customer or client reimburses you or gives you an allowance for these expenses in connection with your work.
  • You provide adequate records of these expenses to your customer or client. In such cases, the client is the one subject to the 50 percent limitation.


Records for Entertainment Deductions

To support your business entertainment deductions you should record:
  • The amount of the expense
  • The business purpose of the expense
  • The business relationship to the people being entertained, using the facility
  • The time and place of the expenditure, if the expense is for travel, entertainment, or a business gift

TIP: In most cases, dues to country clubs and similar recreational clubs aren’t deductible, even if you use them for business activities.




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