Hosting a holiday party for your employees can be a great morale booster, but it also comes with tax considerations. Most entertainment expenses are currently nondeductible, and business meals are generally only 50% deductible. But under certain conditions, you can deduct 100% of party costs. The event must be for your entire staff and not be “lavish or extravagant.” Deductible costs include food, beverages, decorations, live music and venue rentals. However, parties that primarily benefit owners, partners or highly compensated employees may face deduction limits. Proper documentation is key to supporting the deductions. Contact us with questions.
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