Tax Law and News Tax Benefits of Company In-Home Holiday Parties Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Gin Goodman Published Dec 6, 2017 2 min read What’s better than throwing a party that can also provide tax benefits? How is it possible, and how can your firm and your clients get in on this opportunity? Right now, we are in the midst of the company holiday party season. What better way to let employees know they are appreciated than a company holiday party that is 100 percent deductible? Under most circumstances, a company party for employees and their family members is 100 percent deductible as a business expense. Even better, unlike many other entertainment deductions, business talk is not even required. Business owners who throw in-home parties may be allowed an entertainment expense deduction on their tax returns. There are several types of in-home parties with varying amounts allowed for different types of entertainment deductions. Here are a few points to keep in mind: Make sure there is an open invitation to all employees. This should be a company holiday party and not selected friends. If you want to deduct 100 percent of your party expense, don’t invite clients and, of course, advise your customers to do the same. If you do invite anyone else, only 50 percent of any expenses will be deductible for clients or customers. That is, if you choose to have a holiday party with employees and clients/customers, you will need to determine the expenses that should be allocated to employees, for which you can get a 100 percent deduction, and those that should be allocated to clients/customers, for which you only get 50 percent. A holiday party can be a tax-efficient replacement for a holiday gift to employees. While a gift can become taxable to the employee if its value exceeds $25, a company holiday party is a way to make employees feel appreciated without any tax consequences to the attendees. Gifts and employee parties are equally tax-deductible to the employer, but the holiday party option won’t leave employees feeling as if they’ve been cheated or inconvenienced by an unexpected tax bill. For more information on business entertainment expenses, review Topic 512 from the IRS. Have fun and enjoy the holidays! Editor’s note: For more tax tips for the holidays, read “Tis the Season: A Tax Guide to Holiday Giving” on the Intuit® ProConnect™ Tax Pro Center. Previous Post How to Avoid the W-2 Email Scam Next Post IRS e-Services Migration and Registration Requirements Written by Gin Goodman Gin Goodman is a tax content analyst for ProSeries® at Intuit® ProConnect™. More from Gin Goodman Comments are closed. Browse Related Articles Tax Law and News Business Meals Deduction for 2020: 100% Fully Deductib… Tax Law and News Tax Reform Makes Changes to the Meals and Entertainment… Tax Law and News IRS Issues Guidance on TCJA Changes to Business Expense… Tax Law and News ‘Tis the Season: A Tax Guide to Holiday Giving Tax Law and News Year-End Tax Tips and Tax Reform for Business and Indiv… Tax Law and News Self-Employed Tax Tips for Construction Contractors Tax Law and News 15 must-see tax breaks for small business owners in 202… Tax Law and News 5 Financial Moves Self-Employed Workers Can Make Now to… Tax Law and News Share These 11 Lesser-Known Tax Deductions With Your Cl… Intuit® Accountants News Happy Tax Day 2019!