Probably the most common business deductions are meals and entertainment. However, people are often confused about whether the expenses are fully deductible, partially deductible or not deductible at all.50% DeductibleThe general rule for deducting meals and entertainment expense is that 50% of the cost is deductible provided the following requirements are met.Requirement #1The expense has to be ordinary and necessary in the trade, business, or profession. In other words, it must be commonly accepted to have this expense and it must be appropriate in the trade or business. For example, business owners routinely have lunch with prospective clients to discuss business with the goal of attracting additional business. This is a common and necessary business expense.Requirement #2The expense must be directly related or associated to the active conduct of your business. To meet this requirement, you must engage in a business conversation during, before, or after the entertainment. If the business discussion is only incidental to the entertainment, the entertainment expenses do not qualify.The 50% limit applies to business meals or entertainment expenses you have while traveling away from home on business, entertaining customers at your place of business, a restaurant, or other location, […]

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