Businesses can fully deduct 100% of the cost of:
- Office parties and outings held for the benefit of its employees (other than highly-compensated employees)
- Meals and entertainment provided to employees as compensation and reported as taxable wages
- Meals and entertainment expenses reimbursed to employees upon submission of employee expense reports
However, Things like free coffee, donuts, and snacks provided at the workplace, as well as onsite meals for employees working overtime, are considered “meals provided for the convenience of the employer.” these are now 50% deductible in tax years 2018 through 2025, and nondeductible after that.
Also, the Jobs Act of 2018 has suspended all other entertainment expense deductions in 2018 through 2025. Prior to that, businesses were allowed to deduct 50% of the face value of entertainment tickets and events, and 100% of the cost to qualified charitable events, if the purpose was business-related.
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