Maxine Aaronson, Attorney at Law
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Tax Newsletter

  • College Expenses May be Deductible
    You may be able to receive tax benefits if you are saving or paying for expenses related to a higher education, either for yourself or for a family member. There are a number of tax benefits that you may be entitled... Read more.
  • Deducting Expenses for Volunteer Services
    You may be able to deduct certain expenses that are related to volunteer services offered to a qualified charitable organization. However, these services should not have been reimbursed or used for personal... Read more.
  • Can You Deduct Expenses Related to Gifts?
    If you give business gifts either directly or indirectly to clients or potential clients, you may be able to deduct some or all of the cost of the gifts. Business gifts that may typically be characterized as entertainment... Read more.
  • "Excess Alimony" Tax Rules for Divorce Payments
    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.
Tax News Links

Entertainment and Meals: The 50% Rule and Exceptions

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