Company Holiday Parties

Larry Villano, Publisher of Loopholelewy.com

The holiday season is just around the corner. If your self-employed and have employees, paying for a holiday party can be a nice fringe benefit for them. Not only will they appreciate it, you can deduct 100% of the cost of the party, including meals.

Normally, the deduction for business-related meal costs is limited to 50% of the cost of the meal. However, the 50% limit does not apply to meal costs for holiday parties, picnics, and other annual company-related events that you pay for. You get to deduct 100% of the cost of the event, including meals.

If you are an employee, the value of company holiday parties, picnics, and other similar events you attend is considered a tax-free fringe benefit.