Quick Answer
Salespeople can only deduct 50% of business meal costs with clients, but most other entertainment expenses (like tickets to sporting events, golf outings, or concerts) are no longer deductible as of 2018. However, meals during business meetings remain 50% deductible if they meet IRS requirements.
Best Answer
Diana Flores, EA
Best for salespeople who regularly meet clients for meals and entertainment to close deals
What entertainment expenses can salespeople still deduct?
The Tax Cuts and Jobs Act of 2017 eliminated most entertainment deductions effective 2018, but business meals with clients remain 50% deductible if they meet specific IRS requirements. This means if you spend $2,000 annually on client dinners, you can deduct $1,000 as a business expense.
Business meals that qualify for the 50% deduction:
Example: Sales rep's deductible entertainment expenses
Let's say you're a pharmaceutical sales rep who spent the following in 2026:
Your actual deductions:
Key requirements for deductible business meals
According to IRS Publication 535, business meals must meet these criteria:
1. Business purpose: The meal must be directly related to your business or associated with a substantial business discussion
2. Not lavish: The expense must be reasonable, not extravagant
3. You or employee present: You or your employee must be present at the meal
4. Proper documentation: Keep receipts showing date, amount, business purpose, and attendees
What's NOT deductible anymore
Documentation requirements
For each business meal, record:
Comparison: Deductible vs. Non-deductible expenses
What you should do
1. Shift your approach: Focus spending on business meals rather than entertainment
2. Document everything: Use a smartphone app to photo receipts and note business purpose immediately
3. Separate personal from business: Never mix personal dining with business meal deductions
4. Consider alternatives: Hosting clients at your office with catered meals is 50% deductible
Key takeaway: Salespeople can deduct 50% of qualifying business meals with clients, but entertainment expenses like golf, concerts, and sporting events are no longer deductible as of 2018.
*Sources: [IRS Publication 535](https://www.irs.gov/pub/irs-pdf/p535.pdf), Tax Cuts and Jobs Act of 2017*
Key Takeaway: Salespeople can deduct 50% of business meals with clients but zero entertainment expenses like golf or sporting events since 2018.
Deductible vs. non-deductible entertainment expenses for salespeople
| Expense Type | 2026 Deductible Amount | Notes |
|---|---|---|
| Client dinner at restaurant | 50% of cost | Must discuss business |
| Golf with prospects | 0% | Entertainment not deductible |
| Coffee meeting with client | 50% of cost | Business discussion required |
| Stadium box for clients | 0% | Entertainment facility |
| Conference meal while traveling | 50% of cost | Business travel meal |
| Country club membership | 0% | Club dues not deductible |
More Perspectives
Diana Flores, EA
Best for salespeople who primarily work from an office and occasionally take clients to lunch
Business meal deductions for office-based salespeople
As an inside salesperson, your entertainment expenses are typically much lower than field reps, but you can still claim valuable deductions for client meals. The key is understanding what qualifies and keeping proper records.
Common deductible scenarios for inside sales:
Example calculation for inside sales rep
If you spend $1,800 annually on qualifying business meals:
Documentation strategy for occasional entertainment
Since your meal expenses are infrequent, create a simple system:
1. Use your phone to photograph every receipt immediately
2. Text yourself the business purpose and attendees
3. Create a monthly expense report
4. Keep a separate credit card for business expenses
Remember: Even small amounts add up. That $45 lunch with a prospect saves you about $11 in taxes if you're in the 24% bracket.
Key takeaway: Inside salespeople should track every business meal, no matter how small - even a $30 coffee meeting saves you $7+ in taxes.
Key Takeaway: Inside salespeople should track every business meal, no matter how small - even a $30 coffee meeting saves you $7+ in taxes.
Diana Flores, EA
Best for real estate professionals who frequently entertain clients during property showings and closings
Entertainment deductions specific to real estate agents
Real estate agents often spend heavily on client entertainment, from closing celebration dinners to open house refreshments. Understanding what's deductible can save thousands annually.
Deductible real estate entertainment (50%):
Not deductible (0%):
Real estate agent meal deduction example
Annual entertainment expenses for successful agent:
Deductible amounts:
Special considerations for real estate
Open houses: Food costs are only 50% deductible if there's substantial business discussion. Simple refreshments for casual browsers don't qualify.
Client appreciation events: These are generally not deductible unless there's a clear business purpose beyond maintaining goodwill.
Broker-hosted events: If your brokerage pays and doesn't reimburse you, those expenses may not be deductible on your personal return.
Key takeaway: Real estate agents can deduct 50% of business meals but should focus spending on closing dinners and showing lunches rather than entertainment activities.
Key Takeaway: Real estate agents can deduct 50% of business meals but should focus spending on closing dinners and showing lunches rather than entertainment activities.
Sources
- IRS Publication 535 — Business Expenses
Related Questions
Reviewed by Diana Flores, EA on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.