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Tax Newsletter

  • Keeping Accurate Records Of Charitable Contributions
    A tax deductible item may be subtracted from a taxpayer’s income, thereby reducing taxable income before calculating the amount of tax owed. The resulting tax savings vary, depending on the taxpayer’s income tax bracket. A... Read more.
  • Reliance Upon an Expert as Cause for Tax Fraud
    When a taxpayer fails to file a tax return or to pay a tax that is due, the IRS will impose a penalty. However, a taxpayer will be excused from paying the penalty for failure to file or pay if he or she shows that there was reasonable... Read more.
  • Making Charitable Bequests with Non-U.S. Assets
    Taxpayers who make contributions to qualified charitable organizations are entitled to a tax benefit in the form of a charitable deduction on their income taxes. However, the issue becomes more complex when a non-U.S. citizen makes a... Read more.
  • Business Gifts: What is Deductible?
    If you give business gifts either directly or indirectly to clients or potential clients, you may be able to deduct some or all of the cost of the gifts. Business gifts that may typically be characterized as entertainment... Read more.
Tax News Links

Deductions for Business Meals and Entertainment: The 50% Rule

In most cases, you can deduct no more than 50% of certain unreimbursed business-related meals and entertainment expenses on your income tax return. This limit applies to employees or their employers, and to the self-employed.

Exceptions

However, you may be able to deduct more than 50% of an expense if it meets one of the following exceptions:

  • Your employer reimburses you for the expense under an accountable plan
  • Your business entails the sales of meals or a form of entertainment
  • The expense is for a charitable sporting event
  • The expense is for advertising
  • You are self-employed

Self-Employment

If you are self-employed, you may be exempt from the 50% limit if:

  • Your expenses are because you are an independent contractor
  • Your client reimburses you for your expenses
  • You provide adequate records of these expenses to your customer or client

You must meet all three of these requirements in order to be exempt from the 50% limit rule.

Entertainment Tickets

Usually, you cannot deduct more than the face value of a ticket that you claim as an entertainment expense. You cannot deduct service fees or any amount over the face value that you may have paid a scalper.

However, if the ticket is for a sports event that benefits a charitable organization, you may consider the full cost of the ticket, even if it is more than face value, if:

  • The event’s main purpose is to benefit a qualified charitable organization
  • Entire net proceeds go to the charity
  • The event uses volunteers to perform substantially all the event’s work
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The Law Offices of Marian C. Blakeslee
The Law Offices of Marian C. Blakeslee is located in Sausalito, CA and serves clients in and around Sausalito, Mill Valley, Corte Madera, Larkspur, Belvedere Tiburon, Greenbrae, San Quentin, Stinson Beach, San Rafael, San Anselmo, Fairfax San Francisco, Ross, Novato, Woodacre, San Geronimo, Nicasio, Forest Knolls, South San Francisco, Alameda County, Contra Costa County, Marin County and throughout northern and southern California.
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