Travel & Entertainment Expenses

In general, you cannot deduct travel, meal, and entertainment expenses unless you can establish that the expense was directly related to a business activity or discussion. Plus, you can only deduct 50% of your business meal and entertainment expenses, and most club dues cannot be deducted.

For a more complete list of expenses and their deductibility, click here.

Substantiation Requirements

To substantiate deductions, be sure to keep supporting documents, such as canceled checks and receipts, for expenses of $75 or more. Record items in a travel log or on the back of a receipt, indicating the following:

  • Date, place, amount, and business purpose of expenditure.
  • Name and business affiliation of person(s) you are entertaining, or business purpose of trip.
  • In the case of meals and entertainment, all of the above, plus evidence that the activity directly preceded or followed substantial business discussion associated with your business.

Personal expenses should be separated from business expenses.

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To ensure that you receive the deductions to which you are entitled, think through your expenses:
  • Are gifts incorrectly recorded as entertainment?
  • Are subscriptions incorrectly recorded as dues?
  • Are fully deductible expenses, such as employee recreation or holiday parties, incorrectly recorded as entertainment?
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