Is Client Entertainment Tax Deductible for Your Business?

No, client entertainment is generally not tax deductible as a business expense. The IRS considers this a personal expense, even if it has some connection to your work activities. However, there may be limited exceptions in specific circumstances.

Key Rules for Deducting Client Entertainment

The Tax Cuts and Jobs Act (TCJA) of 2018 ELIMINATED the deduction for entertainment, amusement, or recreation. This includes concert tickets, sports games, and shows—even if business is discussed.

Requirements to Claim This Deduction

• Eliminated by TCJA 2018
• No longer 50% deductible
• Includes concerts, shows, sporting events

How to Document Client Entertainment for Tax Purposes

Proper documentation is critical for any business deduction. For client entertainment, you should:

• Keep all receipts and invoices showing the amount paid
• Record the date of the expense and the business purpose
• If mixed-use, maintain a log showing business vs. personal usage
• Store records for at least 3 years (7 years for major purchases)

Source: IRC § 274(a). This information is for educational purposes only. Consult a qualified tax professional for advice specific to your situation.