where on sched c do we deduct cost of a business event

[dkg2000]

My wife organizes weekend retreats for quilters. She rents a block of hotel rooms, event space, and purchases meals for the event. I am having trouble figuring out the best place to enter these expenses on Schedule C. Would the meals be under Meals (100%)? Would the hotel rooms be under Rent? Or would everything end up under Other Expenses?

Thanks for any help,

Dave

[DianeW777]

The hotel rooms would be under Travel Expense and the meals expense should be under the meals category and generally limited to 50% after you enter the full amount including tax and tip.

You can continue to deduct 50% of the cost of business meals if you (or your employee) are present and the food or beverages aren't considered lavish or extravagant.  No entertainment expenses are allowed under the Tax Cuts and Jobs Act (TCJA).

Exception to the 50% Limit for Meals

Self-employed reimbursed expenses.

If you are self-employed, your deductible meal expenses aren’t subject to the 50% limit if all of the following requirements are met.

1. You have these expenses as an independent contractor.
2. Your customer or client reimburses you or gives you an allowance for these expenses in connection with services you perform.
3. You provide adequate records of these expenses to your customer or client. (See chapter 5.)

In this case, your client or customer is subject to the 50% limit on the expenses.

For further details review Publication 463.

[dkg2000]

I'm not sure you understand. The hotel rooms and meals are not for my wife or an employee. They are for the attendees of the event. She charges one overall fee to the attendees for the event. She takes care of paying for the various expenses to host the event.

[AnnetteB6 · Accepted solution]

If I understand your situation correctly, your wife's business is to host quilting retreats.  Her income is derived from the fees paid by the attendees and part of her expenses are for the hotel rooms and meals provided to the attendees.

If that is the case, the meals would be 100% deductible because they are a direct business expense and not incurred by your wife during business travel (which would be limited to 50%).  If there was a charge paid for the event space, it could be entered as 'rent' or be included under miscellaneous business expenses as its own category.  The hotel costs should probably go under the miscellaneous business expense category with its own description and amount entered.

@dkg2000 

[dkg2000]

Hi Annette,

Thanks for your answer. Would the meals go under meals or should we just put it with everything else under miscellaneous/other expenses with a separate description and total?

[AnnetteB6]

You could do it either way.  Since some of the other expenses are going under miscellaneous, it would be fine to enter a description and amount for the meals in that section. 

If you did enter it in the dedicated meals expense category, just be sure it is entered in the 100% deduction box.

The bottom line expense amount should be the same no matter which option you choose.

@dkg2000