Can you still deduct client entertainment expenses in 2026

Navigating the complex landscape of tax deductions is a perennial challenge for business owners and independent contractors. A common question that arises is whether client entertainment remains a valid write-off. The short answer is that the tax laws underwent significant changes several years ago, and those rules remain firmly in place.

The Shift in Tax Policy

Prior to the Tax Cuts and Jobs Act, businesses could often deduct 50% of expenses related to entertaining clients. However, the legislation effectively eliminated the deduction for most entertainment expenses. Whether you are taking a client to a sporting event, a theater performance, or a golf outing, these costs are generally no longer tax-deductible.

What About Business Meals?

While entertainment is off the table, business meals remain a distinct category. You can typically deduct 50% of the cost of a business meal if the following criteria are met:

• The meal is ordinary and necessary for carrying on your trade or business.
• The meal is not lavish or extravagant under the circumstances.
• The taxpayer or an employee of the taxpayer is present at the meal.
• The meal is provided to a current or potential business customer, client, consultant, or similar business contact;

Crucial Distinctions

The IRS draws a sharp line between a meal and entertainment. If you take a client to a restaurant to discuss business, the meal portion is generally deductible at 50%. However, if you take that same client to a professional baseball game, the tickets are considered entertainment and are not deductible, even if you discuss business during the game.

If you purchase a package that includes both food and entertainment—such as a suite at a stadium that provides catering—you must allocate the costs. You can deduct the portion of the invoice that relates to the food and beverages, provided they are stated separately on the bill or invoice.

Best Practices for Documentation

To ensure compliance, keep meticulous records. Always document:

1. The business purpose of the meeting.
2. The names of the individuals present.
3. The date and location of the event.
4. The exact cost of the meal.

Consulting with a certified tax professional is highly recommended to ensure your specific business activities align with current IRS guidelines.