Neil &  Company CPAs, PC

A Professional Corporation

1184 North 15th Street, Bozeman, MT 59715

 

Phone: 406-587-9239

 

November 2022

November 2022 Client Profile

Client Profile

Ann’s planning to host a company holiday party for her employees and select clients.How much of the costs can she deduct as a business expense?


Holiday parties for employees’ benefit are generally 100% tax deductible. Costs to entertain guests other than employees must be directly related to the active conduct of business to claim the same tax benefits.


If inviting clients is an act of goodwill and Ann has no intent to talk about business with them, the expenses for clients will likely be 50% deductible.

Ann will need to allocate her party expenses between employees and clients. Unless there are specifically identifiable expenses for clients – like providing them with goodie bags or gift cards as a token of appreciation, she can do a quick allocation. For example, if there are 100 guests and 60 of them are employees and their spouses, 60% of the costs will be 100% deductible, and she can deduct half of the remaining 40%.


Client Profile is based on a hypothetical situation. The solutions discussed may or may not be appropriate for you.


SUBSCRIBE

Enter your Name and Email address to get
the newsletter delivered to your inbox.

Please include name of person that directed you to my online newsletter so I can thank them personally.


CONTACT US

Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.

The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.