Travel and Entertainment Expenses

About Travel and Entertainment Expenses:

Travel and Entertainment (T&E) Expenses are ordinary and necessary business expenses paid while traveling away from home for a business, profession, or job. An ordinary expense is one that is common and accepted in a given business, trade, or profession. A necessary expense is one that is helpful and appropriate to the business. Lavish or extravagant expenses are not deductible. See also commuting expense.

Entertainment expenses are expenses incurred for entertaining a client, customer, or employee. Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation. Examples include entertaining guests at nightclubs; at social, athletic, and sporting clubs; at theaters; or at sporting events. As a result of the 1993 tax act, only 50% of entertainment expenses and business meals is deductible. Former IRC (check if this IRC provision is current here) §274.