A note from Senior Tax Accountant Kaitlin M. Newkirk:

Your workday rarely fits the 9-to-5 cliché. You are on the job even when you are not in the office, frequently combining business with lunch or entertainment. Your colleagues and employees do the same.

Kaitlin Newkirk
Kaitlin Newkirk, CPA

Many of those expenses are deducted from your tax liability at 50 percent of the cost, but in some cases, 100 percent of the cost may be deductible. It is an important – and potentially valuable – distinction, and the tax professionals at Barnes Dennig encourage you to be aware of the possibilities. It could take a bigger bite out of your tax bill.

For instance, you may be able to deduct 100 percent of the cost of your company’s recent Christmas party. If you order in lunch for a staff meeting or buy dinner for an employee who is working overtime, you can deduct 100 percent of the cost. Similarly, meals that are offered free to the public, such as an auto mechanic who offers free coffee and donuts to customers while they wait for an oil change, are 100 percent deductible.

Click here to view a more-detailed list of meals and entertainment expenses that qualify for 100 percent deduction, as well as those that qualify for 50 percent deduction and those that are not deductible. Contact your Barnes Dennig representative with additional questions.

By maximizing your deductions, you will lower your effective tax rate and improve cash flow by reducing your tax liability – which makes all those business lunches a little easier to swallow.

Leave a Reply

Your email address will not be published. Required fields are marked *