*This post is a continuation of Entrepreneurial Deductions (S.O.D. pt 3)*
On this installment we will focus on deducting meals / entertainment and Continuing Education vs Conventions.
According to entrepreneur.com if you go out to dinner with your spouse and discuss business it’s deducible! This is technically true as the IRS defines this category as including “the discussion of business”. There is also an “associated entertainment expenses” category which (according to Score.org) is less clearly defined. The example they provide states that if a client were to fly in on Sunday for a meeting on Monday, you could take them to a baseball game Sunday evening and deduct it as a business entertainment expense. Pretty much if the expense happens before or after a substantial business related discussion, it can be claimed on the entertainment expenses category. For more information you can go to IRS Publication 463.
No this is not the latest HBO fight night. When can you deduct going to a seminar or convention? According to Bench.com you can deduct the expenses when they add value or increase your expertise in a relevant skill set. For instance as the AZ Republic explained it, you are an investment professional who was attending a seminar on investing. If you could prove it was relevant to your business, then you could deduct all expenses. As with the previous deductions – keeping receipts is a MUST! In addition they recommend that you even keep seminar information (schedules or pamphlets) that could prove there were relevant topics there.
An interesting note made by the AZ Republic is that if your job or business requires or could benefit from college you can deduct those costs as well. This includes books, tuition, and transportation to and from class (at 0.547 cents per mile).
With all good things come the mildly inconvenient. If a seminar or college course could lead to a new career it could be considered as unnecessary according to Bench.com. So let’s say (as they put it) you are taking law courses to help you understand contracts for your business. Since they could also lead to a new career and thus are non deductible.