Entertainment

• Entertaining clients is a standard business practice that involves a variety of amusement activities. "Examples include entertaining guests at nightclubs; at social, athletic, and sporting clubs; at theaters; at sporting events; on yachts; or on hunting or fishing trips," according to the IRS. You can deduct meal costs associated with these various forms of entertainment. Expenses for food, beverages, taxes and tip are all deductible, but you must be present at the time the meal is served to your colleague, client or employee to claim this deduction.
  
  

Travel

• While traveling on business, you will incur costs for meals. You can deduct these expenses using a standard meal allowance or the actual cost of the meal. The standard meal allowance method uses a fixed daily meal cost and calculates the total cost of meals for your trip based on the number of days you travel each year.
  
  

Lavish Meals

• Be wary of the temptation to treat yourself to lavish and extravagant meals while travelling. The IRS forbids deductions of such meals and it may be difficult for you to prove the necessity of the expense when audited. However, "Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts," explains the IRS.
  
  

50% Limit

• In general, you can deduct 50 percent of your meal and entertainment expenses each tax year. Use this deduction only when your employer does not reimburse you for an expense. "The 50% limit applies to employees or their employers, and to self-employed persons (including independent contractors) or their clients, depending on whether the expenses are reimbursed," states the IRS.