All work and no play can make Jack (or Jill) a disgruntled employee or client. So, you may decide to treat some of your top customers or valued employees to an outing as the summer draws to a close. By knowing the tax-law rules for entertainment costs, you can double your pleasure with top-dollar write-offs.
The 50-percent rule
For starters, you're generally permitted to write off 50 percent of your qualified business entertainment and meal ex-penses. That 50-percent rule applies to expenses paid by employers, employees and self-employed people (including independent contractors). But employees can be reimbursed tax-free for 100 percent of their out-of-pocket costs.
The 50-percent limit extends to dollars spent while traveling away from home on business, entertaining clients at your place of business or some other location or payments at a business convention, luncheon or other meeting.
For instance, you c...(register to read more)
- How to Fire an Employee the Legal Way: 6 Termination Guidelines
- Small Business Tax Deduction Strategies
- Want to quit your job? Pin it on tax law
- Secure permission to do a good deed
- Cash in, not out: Reap a tax bonanza on retirement plan payouts
- Questions and answers about California's new Paid Sick Leave law