Example of Entertainment Expenses of Non-Employees
- You attend a business convention and bring your spouse along for purely social reasons.
- Round-trip air fare for yourself and your spouse totaled $500 ($250 per ticket)
- Cab fare from the airport to the hotel and back the airport cost $20 (including the tip)
- You reserve a double room for $200 per night for two nights.
- A single room would have cost $150 per night
- Goodwill entertaining:
- After the business meeting at the convention (held in your hotel) you take a business associate and a prospective customer, and their spouses, to dinner and a show.
- It would be impractical for you to leave your spouse alone so your spouse also participates in the business-related dining and entertainment.
- The costs of dining was $350 (including tax and tip)
- You bought six tickets to see a play. You paid a scalper $100 per ticket ($600). However, the face value of all tickets was $300 ($50 each x 6)
- Cab fare to and from the dining and entertainment facility was $30 (including the tip).
- Your own meal costs, other than those related to dining with business associates, totaled $80 (including taxes and tips).
- You leave a $10 tip for maid service at the hotel.
Your May Deduct the Following:
- Air Fare: $250 (100%) for your own air fare but not your spouse's.
- Cab fare: $20 (100%) for round-trip cab fare between the airport and hotel.
- Hotel Room: $300 (100%) for your room (the single room rate of $150 x 2 nights).
- Dining expenses: $175 (50% x $350) for dining expenses for yourself, your spouse, your business associate and prospective customer and their spouses.
- Tickets: $150 for the six tickets (50% x $300 - face value of all tickets).
- Cab fare: $30 (100%) round-trip for cab fare between the hotel, restaurant, and theater.
- Your own non-entertainment related meals: $40 (50% x $80) for your own meals, other than meals related to business entertainment.
- Your spouse's meals: No meals for your spouse are deductible except for the meals related to the goodwill entertainment of business associates where your spouse participated.
- Hotel maid service: $10 tip (100%) for hotel maid service.
Travel Expenses: Employee Travel Expenses;
In Reporting Travel Expense Reimbursement on Form W-2;
Employee Accountable Plan