Is Entertaining Clients Tax Deductible?

entertaining tax deductionMany business owners think that anytime they entertain a client, be it at a sporting event, dinner, or a round of golf, that that expense is fully deductible. And while there are situations where those expenses can be deducted, there are certain requirements to meet in order for the cost to qualify for the deduction.

Requirements

Business – This should go without saying, but business must be done for a deduction to count. If you take a client to a baseball game with every intention of selling a new product, but it never comes up, and instead you talk sports and family the whole time, then that is not deductible. But by discussing a client’s relationship, a new product, a contract, or something along those lines, you have met this requirement.

Attendees – Depending upon who is at the event, there may be a limit to how much of the expense is deductible. If, for instance, you host a party for clients and prospects, you may be limited to only writing off 50% of the …

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How to Talk Business While Entertaining Clients

business entertainingWe’ve all been there – you are hosting an event with clients and prospects, it cost far more than you anticipated, but you just knew it would lead to business. The event is moving along nicely, but no real business has come up and you don’t know how to move past small talk to business without coming across as pushy. Unfortunately, this all too common experience can make or break the success of an event and can make or break an opportunity to pursue a client.

In these situations, timing is everything. You can try laying out a canned pitch to kick off the event, however, hose often goes unheard and are never brought back up. Instead, it’s usually better to wait and let conversation happen organically. Start with some small talk, discuss weather and family, and try to steer the conversation to business. In a perfect world, your client will bring it up, not you. But don’t let the night get away from you. As the event winds down, you will have responsibilities and …

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