Like most business owners, you probably incur costs on wining and dining customers or clients. You’d think that this is an easy tax deduction, but you’d be wrong. The tax law is peppered with rules and limitations that curtail or prevent you from deducting meal costs you’d think would be a legitimate write off. You meet a customer for breakfast at the local diner or take a client to dinner at a fine restaurant. Provided the meal is for business and you’re not just socializing, you can only deduct 50 percent of the cost. If you eat out rather than brown bag it for lunch, the cost is on you. It’s a nondeductible personal expense. If the meal is deductible, you need certain records to back up your claims. Technically, no deduction can be claimed without these records, although there are some limited exceptions. If you have difficulty keeping records and receipts for meals when out of town on business, you can deduct a standard meal allowance.
It may be less than your actual meal costs, but you won’t need receipts. If you have employees who travel on business, you may want to use the standard rate to reimburse them for their meal costs out of town. If you hold a party for your staff -- in your facility or a restaurant -- you can deduct all of the cost in this instance. As long as the party is for the benefit of employees and is not limited to the top brass, you can write off 100 percent of your costs.