714-505-9000 cpas@hmwccpa.com

Generally, businesses are limited to deducting 50% of allowable meal and entertainment (M&E) expenses. But certain expenses are 100% deductible, including expenses:

For food and beverages furnished at the workplace primarily for employees,
Treated as employee compensation,
That are excludable from employees’ income as de minimis fringe benefits,
For recreational or social activities for employees, such as holiday parties, or
Paid or incurred under a reimbursement or similar arrangement in connection with the performance of services.
If your company has substantial M&E expenses, you can reduce your tax bill by separately accounting for and documenting expenses that are 100% deductible. If doing so would create an administrative burden, you may be able to use statistical sampling methods to estimate the portion of M&E expenses that are fully deductible. For more information on how to take advantage of the 100% deduction, please contact us.