Deductible Travel, Meal, and Entertainment Expenses

Travel (deductible if directly related to business)
  • Air, rail, bus, or taxi fares.
  • Car maintenance costs.
  • Lodging en route and at destination.
  • Baggage charges.
  • Telephone and fax expenses.
  • Laundry and dry-cleaning expenses.
  • Reasonable tips.
Meals and entertainment (subject to 50% limitation)
  • Food and beverages.
  • Taxes and tips.
  • Room rental for dinner or cocktail party.
  • Cover charges at nightclubs.
  • Tickets for theatre, concerts, or sporting events.
  • Home entertainment.
  • Catering charges.
De Minimis Fringe Benefits (100% deductible)
  • Employee meals or meal allowances for occasional overtime work.
  • Meals provided to employees for the convenience of the employer and on business premises.
  • Occasional office social functions at which refreshments are served.
  • Traditional holiday gifts.
  • The value of theater or sporting event tickets occasionally provided to employees.
  • Miscellaneous benefits such as coffee, doughnuts, and soft drinks. Also, flowers, fruit, or books provided under special circumstances.
  • Reasonable tips.

Technically, de minimis benefits are deductible as employee benefits, not as meals and entertainment expenses. Therefore, make sure you separate these expenditures from other meal and entertainment expenses so they are not mistakenly subjected to the 50% limitation.