How to Deduct Meals and Entertainment for Clients from Business Income?

Allan Madan, CA
 Nov 4, 2014
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Did you know that you can deduct meals and entertainment for clients from your business income? Find out the activities you can deduct to help save you money.

As a business owner, you can only claim a deduction of half the meals and entertainment expenses that you paid for.

mealsentertainment

  1. Amounts for personal meals and personal entertainment expenses are non-deductible. For example, a cup of coffee or a breakfast sandwich that you buy each morning is considered a personal expense and is non-deductible.
  2. You must keep a record of the names and phone numbers of the guests you entertain or purchase meals for. The CRA will ask to see this information when you are audited. As a best practise, write the name and phone numbers on the back of the related expense receipt.
  3. Food that you buy while traveling is also considered a personal expense and non-deductible, unless you are working in a very remote location.
  4. You can claim the entire amount of meals and entertainment purchases for a Christmas party, or up to six events per year.

Here is the tip! Keep all of your receipts for meals and entertainment purchases and give them to your accountant at the end of the year, so he or she can determine which expenses can be deducted.

About the Author – Allan Madan

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation . Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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Disclaimer

The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.

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