Meals and entertainment expenses

The general rule for deductions related to meals and entertainment expenses is that you can deduct up to 50% of the cost of meals and entertainment, or "an amount that is reasonable in the circumstances", whichever is less.

Allowable expenses include:

  • meals eaten with customers
  • the cost of tickets for a theatre, concert, or athletic event, or other performance
  • the cost of private boxes at sports facilities
  • the cost of room rentals to provide entertainment, such as a hospitality suite
  • the cost of cruises
  • the cost of admissions to fashion shows
  • the cost of entertaining guests at clubs (night, athletic, social, and sporting), as well as on vacation and similar trips
  • taxes, gratuities, and cover charges are included in entertainment expenses

With respect to the meals and entertainment expenses, the following costs are disallowed:

  • costs incurred for use of recreation facilities and club dues
  • purchase of season tickets for sporting events (unless satisfactory proof is provided that the tickets are a promotional expense)
  • meals claimed while outside a sales territory or on a vacation
  • meals taken after a golf game (at the club house)

For detailed information about these expenses, see Food, Beverages, and Entertainment Expenses.

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