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Know the tax scores on country club dues

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. I’ve started a new business venture with some friends. To attract clients, we plan to entertain people at a nearby country club. If I pay the annual club dues out of my own pocket, can I deduct the cost on my personal return? S.M., Wilmington, Del.

A. You can’t deduct country club dues as business expenses. But you may be able to deduct 50 percent of the cost of entertaining clients (or prospective clients) at the club, including drinks, dinner, greens fees, etc. To qualify, the entertainment must be directly related to or associated with your business (i.e., preceding or following a substantial business discussion).

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