Wooing and wowing your clients, prospects and partners is a part of building relationships and your small business. Luckily for all of us, these expenses are 50% deductible and there are tons of opportunities to entertain and chat business. Plus, treating your customers and employees is a fun way to reward them and give them a reason to keep working with you.
VIDEO: Caitlyn shares four common small business expenses you can write off to keep your wallet full.
What is considered a meal and entertainment expense?
You can claim up to 50% of the food, beverages and entertainment expenses you incur or an amount that’s reasonable in the circumstances (whichever is lesser).
But not all entertainment expenses are created equal.
Entertainment expenses you can write off:
- Sporting events
- Bar tabs
- Runway shows
- Concert and event tickets
- Taxi rides
- Lift tickets
- Fishing tours
Entertainment expenses you can’t write off:
- Season tickets
- Recreational facility fees
- Greens fees
Meals and entertainment expenses according to the CRA
What does the CRA allow for meal and entertainment expenses? They say entertainment expenses include tickets and entrance fees to an entertainment or sporting event, gratuities, cover charges, and room rentals such as hospitality suites.
They also have special rules for fishers. See their website for more info.
Food and drinks
Taking your clients out for a meal or drinks has multiple benefits: you can help build your relationship to grow the business and you can write off 50% of the full tab including tips. As long as it’s for business use, food and booze of any kind can be written off. To make this deduction, you’ll need to forget about going dutch and commit to paying for the meal for both yourself and your client.
Did you know you can host up to six staff parties/events every year? Rewarding or celebrating your team is fun for everyone and 100% tax deductible. Now that’s a win win!
The only catch is that you need to invite all your employees. If the meals or drinks are only open to certain employees, the bill is only 50% deductible.
Client and sales events
Want to celebrate your customers or spread the word about your company? Consider hosting a client appreciation night or an open house; 100% of all food and beverages for the event can be deducted.
To learn more about deductible expenses, read our blog, “Write-offs for the fun-loving business owner.”
When in doubt, give us a shout! Our team of reliable Chartered Professional Accounts (CPAs) is ready to help you with write-offs, deductions, GST, expenses, tax filings and more. They have extensive experience, knowledge and an arsenal of skills to help you win this tax season!
Read more about Bookkeeping topics that may be helpful to you and your small business.