Meals & Entertainment-Is it deductible?

“Your daily caffeine fix may feel necessary to you, but it may not be considered tax deductible. For a business and/or entertainment expense to qualify as a business expense it must meet the following requirements:

1. Main purpose of the expense was active conduct of business.
2. You engaged in business with another person.
3. There was an expectation of deriving income or business benefit at some point in the future.

Unfortunately, the IRS does not consider all entertainment to be created equal.

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Some specific entertainment expenses are NOT deductible, including:

  • Country Clubs
  • Golf Clubs
  • Gym Memberships
  • Airline Clubs
  • Hotel Clubs



Business meals are generally deductible at 50% by meeting the following rules:

  • Directly related to the active conduct of your business
  • Not “lavish” or “extravagant”
  • Either you or an employee must be present at a meal

By adhering to the requirements above, incurring meals and entertainment expense with a genuine intent to conduct active business and generate income will generally provide to be deductible. Keeping your receipts and jotting the detail on them is beneficial in supporting your claim as a business expense.”

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IRS CIRCULAR 230 DISCLOSURE: To comply with requirements imposed by the Department of the Treasury, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written by the practitioner to be used, and that it cannot be used by any taxpayer, for the purpose of (i) avoiding penalties that may be imposed on the taxpayer, and (ii) supporting the promotion or marketing of any transactions or matters addressed herein.

Colby is a rebel and trailblazer. Not your stereotypical psychic. She’s an internationally recognized Psychic Medium, Master Teacher, Radio Host and Author. She recently launched her book Leap of Faith: How To Build Your Spiritual Business. Prior to becoming a professional psychic medium full-time, Colby spent 14 years in accounting and taxation and shares her experience and knowledge for the purpose of giving the direction, inspiration and tools needed to build a successful spiritual business.