Meal and Entertainment Expenses – Operating Expenses
You can deduct meal and entertainment expenses that you incurred to earn business income.
Meal expenses include costs incurred for food and beverages.
Entertainment expenses include:
- the cost of tickets or admission fees to a show or sporting event;
- the cost of rooms rented for entertainment purposes (such as private boxes at sports facilities or hospitality suites in a hotel).
On your receipts or other documents, you can enter additional information concerning your expenses (for example, the reason for the expense and the client's name). You should keep these documents for your records since they will help you justify your meal and entertainment expenses.
In general, the deduction you can claim for meal and entertainment expenses is limited to the lesser of the following amounts:
- 50% of the amount actually incurred and reasonable under the circumstances (hereinafter the “50% limit”);
- the ceiling based on the business's sales.
These limits also apply to the cost of meals taken while travelling to attend a convention, seminar or other similar meeting.
However, these limits may not apply in certain cases.
If you are a member of a partnership that carries on a business and you incurred entertainment expenses in the course of the partnership's business, you cannot deduct these expenses if they are subject to the 50% limit.
For more information about meal and entertainment expenses, deduction ceilings and special cases, refer to the guide Business and Professional Income (IN-155-V).