Can I Write This Off?

Can I write off client appreciation events?

TL;DR

Client appreciation events can be deductible if they are directly related to your business and meet certain IRS criteria.

Detailed Answer

Expenses for client appreciation events can be deductible as business expenses if they are ordinary and necessary for your business. The event must have a clear business purpose, such as fostering business relationships or generating future business. However, entertainment expenses are generally not deductible, so the event must not primarily be for entertainment purposes. For example, a seminar with a meal may be deductible, but a purely social event may not be.

Where to Put It on the Tax Form

Schedule C, Line 27a for sole proprietors; Form 1120, Line 26 for corporations.

Real World Example

A marketing consultant hosts a workshop for clients to discuss new strategies, including a lunch. The cost of the venue and meal can be deductible as long as the primary purpose is business-related.

Calculation Required

A calculation is required for this deduction.

Calculate the total cost of the event, ensuring that any entertainment portion is excluded or separately accounted for, as it may not be deductible.

Audit Risk & Documentation Tips

Keep detailed records of the event, including the business purpose, attendee list, agenda, and receipts. Document how the event is directly related to your business to mitigate audit risk.

IRS Reference

IRS Publication 463, Travel, Gift, and Car Expenses; IRS Code Section 274

Relevant Industries

Small BusinessConsultingMarketingEvent Planning

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 7, 2025

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