How to Deduct a Business Staff Meeting
If you call a couple of your employees into your office to meet, there's no particular write-off. When you provide food, or schedule a staff meeting off-site, you have some tax deductions coming. For example, if your meeting is after-hours and you pay your employees to attend, their wages are deductible.
If you hold a lunch meeting at your favorite restaurant and pay the bill, you can write off 50 percent of the cost, including drinks and tips. If you order in breakfast for an early morning discussion, the same rule applies. This only applies if the meeting is focused on business. Inviting your staff to lunch just for the pleasure of their company is not what the IRS considers a valid tax deduction.
If the meeting is away from your office, you can write off the cost of driving there at 56.5 cents per mile, as of 2013. If you reimburse your employees for mileage, you get to deduct the cost of their trip to the meeting too. The costs for traveling to an out-of-town meeting, including lodging and plane fare, are also completely deductible, assuming everyone you take has a valid business purpose in being there. Meals are only 50 percent deductible though.
If you have to rent off-site space for the meeting, or bring in professionals -- a meeting coordinator or someone to provide training -- those are deductible expenses. Be careful about combining meetings with entertainment, though: renting a conference room is one thing, but you can't rent a fishing camp for your staff and write off the cost. The IRS details the limits on venues -- meetings on yachts or overseas are unlikely to pass muster -- in Publication 463.
Report the deductible costs from the meeting as a business expense on Schedule C for sole proprietorships and Schedule E for partnerships. Your expenses should be reasonable, not lavish, though there's no hard-and-fast rule for what constitutes lavish spending. If you're ordering pizza for an evening staff meeting you're probably on safe ground; caviar's likely to raise IRS eyebrows. Keep receipts for all spending, so that if the IRS audits your business, you can prove the deduction was legit.