As many of you know, a business can generally deduct 50% of entertainment and meal expenses that either follow or precede a substantial business discussion with a client. If a client visits from a distant location, the entertainment may take place the day before or after the meeting.
Strategy: Host a house party within the time restraints. The cost of home entertainment attributable to your business guests is deductible even if you never actually discuss business during the get together. For this purpose, business guests may include your client, his or her associates, you and your employees and everyone’s spouses.
Tip: If you throw a holiday bash for all employees, you can deduct 100% of the cost, regardless of the location of the party. You must however include the entire workforce.