Steps to include entertainment in your budget

Written By Gary Spirer Published March 29th, 2010

Do you entertain clients often? If so, you should understand about taxes and entertainment.

Step 1 Determine how often you entertain clients or employees

Entertainment is often a part of most businesses. If you’ve been an employee at a company you may never have experienced business entertainment before. Perhaps you were never the one being wined and dined, but if you start your own business you’re going to find that you or at least one of your employees is entertaining clients for some reason or another. In fact, there will be reasons to for you to entertain your employees as well such as company parties or luncheons. Business entertainment can be considered anything from dinners, to ball games, to outdoor family gathers and company events.

Step 2 Rationalize why entertainment is needed

For the company, it keeps the moral up and can act as a positive booster even when times are tight and huge annual bonuses cannot be given. You may also want to do some entertaining to attract and maintain your best customers. When you travel out of town, you’re definitely going to be doing some entertaining in some form or another. There will be nightly dinners, drinks or even events to attend.

Step 3 Keep your receipts

Make sure that you are saving your receipts. You may even want to have a business credit card devoted specifically to your business entertainment expenses. The good thing about business entertainment is a good portion of it can be used on your taxes as write-offs. In the past 100% of business entertainment expenses could be written off. Now that number has been reduced to 50%, but still, if you’re entertaining clients, keep a record for your taxes.

That’s it! Remember, entertaining is good for business and for morale boosting at the company, but keep tax rules in mind as you entertain. Please visit for more great business advice.


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