Writing off business expenses
As a business owner, you are constantly having to entertain people to draw up new business. Sometimes your entertainment expenses are to maintain current business relationship. When tax time comes around, you need to figure out which expenses are deductible to minimize your tax liability.
As a general rule, you can deduct entertainment expenses if the expense was use to entertain a client, customer, or employee if the expenses are directly related or associated to your trade or business.
If the entertainment took place in a business setting or the main purpose of the entertainment was to conduct business and you actually did some business and you had more than a general expectation of getting income or some business benefit from the activity then it is deductible.
Or if the entertainment is associated with your trade or business and the entertainment directly preceded or follows a substantial business discussion.
So how can you deduct?
You can deduct 50% of your business entertainment expenses. The transportation cost to the entertainment location is fully 100% deductible.