Can I Claim Client Entertainment as a Business Expense in United States?
No, entertainment expenses are entirely non-deductible since the Tax Cuts and Jobs Act changes that took effect in 2018. Sports tickets, concerts, theater, golf: all disallowed even if business is discussed. Meals are still 50% deductible if separately stated.
Finn does your books in United States
AccountsOS keeps the books for United States businesses, tracks tax deadlines and handles expenses, in plain English. Ask Finn about yours, no signup needed.
What Internal Revenue Service (IRS) says
TCJA amended IRC Section 274 to entirely disallow entertainment, amusement, and recreation expenses. Activities considered entertainment: golf, theater, concerts, sporting events, hunting/fishing trips. Meals at entertainment events can still qualify for the 50% meal deduction IF separately purchased and invoiced. Entertainment is defined by what a reasonable person would consider amusement or recreation, so a sports event, a theater show, a concert or a hunting trip are all out. A club membership of any type is also not deductible. The 50 percent rule applies to the food and drink only when they are bought separately from the event or are separately itemized on the bill, and when the client or prospect is present.
When you can claim
- Meals at a sporting event: 50% if separately invoiced from the tickets
- Charitable event tickets: to the extent of charitable contribution (not entertainment)
- Recreational events for the entire workforce (employee morale): 100% deductible
- Business meals in a restaurant with a client, at 50 percent, when no entertainment is involved
- Items sold to the public as part of the business, such as a concert hosted by a promoter
When you cannot claim
- Sports tickets to take a client
- Concert/theater with prospects
- Golf with vendors
- Country club / fitness club dues
- Yacht, hunting lodge, or similar facilities
- Gifts of tickets to clients, which are treated as entertainment
Good to know
Pro tip: Ask the venue to split the bill: tickets on one line and food on another. Record who attended and the business reason on the day.
Important: The pre-TCJA 50% entertainment deduction is gone. Some state taxes (California) decoupled and still allow entertainment: check state rules separately.
Stop guessing what you can claim in United States
AccountsOS automatically categorises expenses with Internal Revenue Service (IRS)-aware rules and tells you exactly what is claimable.
Try Free