Estimated tax tip savings. Regular business entertainment expenses can be deducted at only 50 percent, but this strategy allows you to deduct 100 percent of your company party. If you spend $10,000 on the party, you can now pick up $5,000 more in deductions.
Okay, so the party is over and the costs are in. Where do those costs sit in your chart of accounts?
Entertainment? That’s the wrong place. Why?
Entertainment expenses usually qualify for only a 50 percent deduction, but lawmakers wisely decided your parties are a business expense important enough to warrant a full deduction.
Think of this as the government’s support for your partying with your employees. The 100 percent deduction is a specific carve out in the tax code and it’s often overlooked. Even better news: Designing your holiday party to qualify is relatively easy. The key is to make the party mostly for ... Log in to view full article.