Maxine Aaronson, Attorney at Law
Attorneys discussing a case. Glasses resting on documents depicting charts/diagrams. The word 'strategy' is highlighted. Puzzles coming together.

Tax Newsletter

  • Charitable Contributions: Proving Value of Contributions
    A tax deductible item may be subtracted from a taxpayer’s income, thereby reducing taxable income before calculating the amount of tax owed. The resulting tax savings vary, depending on the taxpayer’s income tax bracket. A... Read more.
  • Mischaracterization of Divorce Payments as Alimony
    Most divorces involve a division of property between the spouses. If there are children from the marriage, the parent not granted custody usually must pay monthly child support. In addition, one of the spouses may be granted monthly... Read more.
  • Employer Bankruptcy and Employee Benefits
    Generally, a business that is facing serious financial difficulties might seek to file for bankruptcy under either Chapter 7 or Chapter 11 of the U.S. Bankruptcy Code. Chapter 7 bankruptcy is more severe, as it involves a liquidation of... Read more.
  • Tax Issues Related to Contaminated Property
    The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) imposes liability for the investigation and cleanup of contaminated real property without regard to whether the landowner created or allowed the... Read more.
Tax News Links

Deducting More than 50% for Certain Business Expenses

In most cases, you can deduct no more than 50% of certain unreimbursed business-related meals and entertainment expenses on your income tax return. This limit applies to employees or their employers, and to the self-employed.

Exceptions

However, you may be able to deduct more than 50% of an expense if it meets one of the following exceptions:

  • Your employer reimburses you for the expense under an accountable plan
  • Your business entails the sales of meals or a form of entertainment
  • The expense is for a charitable sporting event
  • The expense is for advertising
  • You are self-employed

Self-Employment

If you are self-employed, you may be exempt from the 50% limit if:

  • Your expenses are because you are an independent contractor
  • Your client reimburses you for your expenses
  • You provide adequate records of these expenses to your customer or client

You must meet all three of these requirements in order to be exempt from the 50% limit rule.

Entertainment Tickets

Usually, you cannot deduct more than the face value of a ticket that you claim as an entertainment expense. You cannot deduct service fees or any amount over the face value that you may have paid a scalper.

However, if the ticket is for a sports event that benefits a charitable organization, you may consider the full cost of the ticket, even if it is more than face value, if:

  • The event’s main purpose is to benefit a qualified charitable organization
  • Entire net proceeds go to the charity
  • The event uses volunteers to perform substantially all the event’s work