Are expenses related to the office Christmas party deductible?

Most of us are aware that generally meals and entertainment expenses are only 50% deductible.  A little known exception to this rule are expenses related to recreational, social or similar activities incurred primarily for the benefit of employees other than highly compensated employees.  For example, food and beverage provided by the employer at a company picnic are fully deductible.  Depending on the salary level of employees attending the party,  this exemption may well apply to the office Christmas party.  However, it should be noted that if customers and clients are also invited the 50% deductible may apply. 


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