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Printable Tax Form 1040

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Printable Tax Form 1040

Printable tax form 1040 Publication 556 - Introductory Material Table of Contents The IRS Mission Reminders IntroductionOrdering forms and publications. Printable tax form 1040 Tax questions. Printable tax form 1040 Useful Items - You may want to see: The IRS Mission Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all. Printable tax form 1040 Reminders Penalty for filing erroneous claim for refund or credit. Printable tax form 1040  You may have to pay a penalty if you file an erroneous claim for refund or credit. Printable tax form 1040 See Penalty for erroneous claim for refund, later under Claims for Refund. Printable tax form 1040 Interest and penalties suspended if notice not mailed within 36 months. Printable tax form 1040  If you file your return timely (including extensions), interest and certain penalties will be suspended if the IRS does not mail a notice to you within 36 months. Printable tax form 1040 See Suspension of interest and penalties, later under Examination of Returns. Printable tax form 1040 Fast track mediation. Printable tax form 1040  The IRS offers fast track mediation services to help taxpayers resolve many disputes resulting from: Examinations (audits), Offers in compromise, Trust fund recovery penalties, and Other collection actions. Printable tax form 1040 See Fast track mediation under If You Do Not Agree. Printable tax form 1040 Introduction The Internal Revenue Service (IRS) accepts most federal tax returns as filed. Printable tax form 1040 However, the IRS examines (or audits) some returns to determine if income, expenses, and credits are being reported accurately. Printable tax form 1040 If your return is selected for examination, it does not suggest that you made an error or are dishonest. Printable tax form 1040 Returns are chosen by computerized screening, by random sample, or by an income document matching program. Printable tax form 1040 See Examination selection criteria, later. Printable tax form 1040 You should also know that many examinations result in a refund or acceptance of the tax return without change. Printable tax form 1040 This publication discusses general rules and procedures that the IRS follows in examinations. Printable tax form 1040 It explains what happens during an examination and your appeal rights, both within the IRS and in the federal court system. Printable tax form 1040 It also explains how to file a claim for refund of tax you already paid. Printable tax form 1040 As a taxpayer, you have the right to be treated fairly, professionally, promptly, and courteously by IRS employees. Printable tax form 1040 Publication 1, Your Rights as a Taxpayer, explains your rights when dealing with the IRS. Printable tax form 1040 Comments and suggestions. Printable tax form 1040   We welcome your comments about this publication and your suggestions for future editions. Printable tax form 1040   You can write to us at the following address:  Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Printable tax form 1040 NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Printable tax form 1040 Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Printable tax form 1040   You can send your comments from www. Printable tax form 1040 irs. Printable tax form 1040 gov/formspubs/. Printable tax form 1040 Click on “More Information” and then on “Comment on Tax Forms and Publications. Printable tax form 1040 ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Printable tax form 1040 Ordering forms and publications. Printable tax form 1040   Visit www. Printable tax form 1040 irs. Printable tax form 1040 gov/formspubs to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Printable tax form 1040  Internal Revenue Service  1201 N. Printable tax form 1040 Mitsubishi Motorway Bloomington, IL 61704-6613 Tax questions. Printable tax form 1040   If you have a tax question, check the information available on www. Printable tax form 1040 irs. Printable tax form 1040 gov or call 1-800-829-1040. Printable tax form 1040 We cannot answer tax questions sent to either of the above addresses. Printable tax form 1040 Useful Items - You may want to see: Publication 1 Your Rights as a Taxpayer 5 Your Appeal Rights and How To Prepare a Protest If You Don't Agree 547 Casualties, Disasters, and Thefts 594 The IRS Collection Process 910 Guide to Free Tax Services 971 Innocent Spouse Relief 1546 Taxpayer Advocate Service–Your Voice at the IRS 1660 Collection Appeal Rights 3605 Fast Track Mediation 3920 Tax Relief for Victims of Terrorist Attacks 4134 Low Income Taxpayer Clinic List Form (and Instructions) 843 Claim for Refund and Request for Abatement 911 Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order) 1040X Amended U. Printable tax form 1040 S. Printable tax form 1040 Individual Income Tax Return 2848 Power of Attorney and Declaration of Representative 4506 Request for Copy of Tax Return 4506-T Request for Transcript of Tax Return 8379 Injured Spouse Allocation 8857 Request for Innocent Spouse Relief See How To Get Tax Help , near the end of this publication, for information about getting these publications and forms. Printable tax form 1040 Prev  Up  Next   Home   More Online Publications
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The Printable Tax Form 1040

Printable tax form 1040 2. Printable tax form 1040   Entertainment Table of Contents Directly-Related Test Associated TestMeetings at conventions. Printable tax form 1040 50% LimitExceptions to the 50% Limit What Entertainment Expenses Are Deductible?A meal as a form of entertainment. Printable tax form 1040 Deduction may depend on your type of business. Printable tax form 1040 Exception for events that benefit charitable organizations. Printable tax form 1040 Food and beverages in skybox seats. Printable tax form 1040 What Entertainment Expenses Are Not Deductible?Out-of-pocket expenses. Printable tax form 1040 You may be able to deduct business-related entertainment expenses you have for entertaining a client, customer, or employee. Printable tax form 1040 The rules and definitions are summarized in Table 2-1 . Printable tax form 1040 You can deduct entertainment expenses only if they are both ordinary and necessary and meet one of the following tests. Printable tax form 1040 Directly-related test. Printable tax form 1040 Associated test. Printable tax form 1040 Both of these tests are explained later. Printable tax form 1040 An ordinary expense is one that is common and accepted in your trade or business. Printable tax form 1040 A necessary expense is one that is helpful and appropriate for your business. Printable tax form 1040 An expense does not have to be required to be considered necessary. Printable tax form 1040 The amount you can deduct for entertainment expenses may be limited. Printable tax form 1040 Generally, you can deduct only 50% of your unreimbursed entertainment expenses. Printable tax form 1040 This limit is discussed later under 50% Limit. Printable tax form 1040 Directly-Related Test To meet the directly-related test for entertainment expenses (including entertainment-related meals), you must show that: The main purpose of the combined business and entertainment was the active conduct of business, You did engage in business with the person during the entertainment period, and You had more than a general expectation of getting income or some other specific business benefit at some future time. Printable tax form 1040 Business is generally not considered to be the main purpose when business and entertainment are combined on hunting or fishing trips, or on yachts or other pleasure boats. Printable tax form 1040 Even if you show that business was the main purpose, you generally cannot deduct the expenses for the use of an entertainment facility. Printable tax form 1040 See Entertainment facilities under What Entertainment Expenses Are Not Deductible? later in this chapter. Printable tax form 1040 You must consider all the facts, including the nature of the business transacted and the reasons for conducting business during the entertainment. Printable tax form 1040 It is not necessary to devote more time to business than to entertainment. Printable tax form 1040 However, if the business discussion is only incidental to the entertainment, the entertainment expenses do not meet the directly-related test. Printable tax form 1040 Table 2-1. Printable tax form 1040 When Are Entertainment Expenses Deductible? General rule You can deduct ordinary and necessary expenses to entertain a client, customer, or employee if the expenses meet the directly-related test or the associated test. Printable tax form 1040 Definitions Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation, and includes meals provided to a customer or client. Printable tax form 1040 An ordinary expense is one that is common and accepted in your trade or business. Printable tax form 1040 A necessary expense is one that is helpful and appropriate. Printable tax form 1040 Tests to be met Directly-related test Entertainment took place in a clear business setting, or Main purpose of entertainment was the active conduct of business, and You did engage in business with the person during the entertainment period, and You had more than a general expectation of getting income or some other specific business benefit. Printable tax form 1040   Associated test Entertainment is associated with your trade or business, and Entertainment is directly before or after a substantial business discussion. Printable tax form 1040 Other rules You cannot deduct the cost of your meal as an entertainment expense if you are claiming the meal as a travel expense. Printable tax form 1040 You cannot deduct expenses that are lavish or extravagant under the circumstances. Printable tax form 1040 You generally can deduct only 50% of your unreimbursed entertainment expenses (see 50% Limit ). Printable tax form 1040 You do not have to show that business income or other business benefit actually resulted from each entertainment expense. Printable tax form 1040 Clear business setting. Printable tax form 1040   If the entertainment takes place in a clear business setting and is for your business or work, the expenses are considered directly related to your business or work. Printable tax form 1040 The following situations are examples of entertainment in a clear business setting. Printable tax form 1040 Entertainment in a hospitality room at a convention where business goodwill is created through the display or discussion of business products. Printable tax form 1040 Entertainment that is mainly a price rebate on the sale of your products (such as a restaurant owner providing an occasional free meal to a loyal customer). Printable tax form 1040 Entertainment of a clear business nature occurring under circumstances where there is no meaningful personal or social relationship between you and the persons entertained. Printable tax form 1040 An example is entertainment of business and civic leaders at the opening of a new hotel or play when the purpose is to get business publicity rather than to create or maintain the goodwill of the persons entertained. Printable tax form 1040 Expenses not considered directly related. Printable tax form 1040   Entertainment expenses generally are not considered directly related if you are not there or in situations where there are substantial distractions that generally prevent you from actively conducting business. Printable tax form 1040 The following are examples of situations where there are substantial distractions. Printable tax form 1040 A meeting or discussion at a nightclub, theater, or sporting event. Printable tax form 1040 A meeting or discussion during what is essentially a social gathering, such as a cocktail party. Printable tax form 1040 A meeting with a group that includes persons who are not business associates at places such as cocktail lounges, country clubs, golf clubs, athletic clubs, or vacation resorts. Printable tax form 1040 Associated Test Even if your expenses do not meet the directly-related test, they may meet the associated test. Printable tax form 1040 To meet the associated test for entertainment expenses (including entertainment-related meals), you must show that the entertainment is: Associated with the active conduct of your trade or business, and Directly before or after a substantial business discussion (defined later). Printable tax form 1040 Associated with trade or business. Printable tax form 1040   Generally, an expense is associated with the active conduct of your trade or business if you can show that you had a clear business purpose for having the expense. Printable tax form 1040 The purpose may be to get new business or to encourage the continuation of an existing business relationship. Printable tax form 1040 Substantial business discussion. Printable tax form 1040   Whether a business discussion is substantial depends on the facts of each case. Printable tax form 1040 A business discussion will not be considered substantial unless you can show that you actively engaged in the discussion, meeting, negotiation, or other business transaction to get income or some other specific business benefit. Printable tax form 1040   The meeting does not have to be for any specified length of time, but you must show that the business discussion was substantial in relation to the meal or entertainment. Printable tax form 1040 It is not necessary that you devote more time to business than to entertainment. Printable tax form 1040 You do not have to discuss business during the meal or entertainment. Printable tax form 1040 Meetings at conventions. Printable tax form 1040   You are considered to have a substantial business discussion if you attend meetings at a convention or similar event, or at a trade or business meeting sponsored and conducted by a business or professional organization. Printable tax form 1040 However, your reason for attending the convention or meeting must be to further your trade or business. Printable tax form 1040 The organization that sponsors the convention or meeting must schedule a program of business activities that is the main activity of the convention or meeting. Printable tax form 1040 Directly before or after business discussion. Printable tax form 1040   If the entertainment is held on the same day as the business discussion, it is considered to be held directly before or after the business discussion. Printable tax form 1040   If the entertainment and the business discussion are not held on the same day, you must consider the facts of each case to see if the associated test is met. Printable tax form 1040 Among the facts to consider are the place, date, and duration of the business discussion. Printable tax form 1040 If you or your business associates are from out of town, you must also consider the dates of arrival and departure, and the reasons the entertainment and the discussion did not take place on the same day. Printable tax form 1040 Example. Printable tax form 1040 A group of business associates comes from out of town to your place of business to hold a substantial business discussion. Printable tax form 1040 If you entertain those business guests on the evening before the business discussion, or on the evening of the day following the business discussion, the entertainment generally is considered to be held directly before or after the discussion. Printable tax form 1040 The expense meets the associated test. Printable tax form 1040 50% Limit In general, you can deduct only 50% of your business-related meal and entertainment expenses. Printable tax form 1040 (If you are subject to the Department of Transportation's “hours of service” limits, you can deduct 80% of your business-related meal and entertainment expenses. Printable tax form 1040 See Individuals subject to “hours of service” limits , later. Printable tax form 1040 ) The 50% limit applies to employees or their employers, and to self-employed persons (including independent contractors) or their clients, depending on whether the expenses are reimbursed. Printable tax form 1040 Figure A summarizes the general rules explained in this section. Printable tax form 1040 The 50% limit applies to business meals or entertainment expenses you have while: Traveling away from home (whether eating alone or with others) on business, Entertaining customers at your place of business, a restaurant, or other location, or Attending a business convention or reception, business meeting, or business luncheon at a club. Printable tax form 1040 Included expenses. Printable tax form 1040   Expenses subject to the 50% limit include: Taxes and tips relating to a business meal or entertainment activity, Cover charges for admission to a nightclub, Rent paid for a room in which you hold a dinner or cocktail party, and Amounts paid for parking at a sports arena. Printable tax form 1040 However, the cost of transportation to and from a business meal or a business-related entertainment activity is not subject to the 50% limit. Printable tax form 1040 Figure A. Printable tax form 1040 Does the 50% Limit Apply to Your Expenses? There are exceptions to these rules. Printable tax form 1040 See Exceptions to the 50% Limit . Printable tax form 1040 Please click here for the text description of the image. Printable tax form 1040 Figure A. Printable tax form 1040 Does the 50% limit apply to Your Expenses?TAs for Figure A are: Notice 87-23; Form 2106 instructions Application of 50% limit. Printable tax form 1040   The 50% limit on meal and entertainment expenses applies if the expense is otherwise deductible and is not covered by one of the exceptions discussed later. Printable tax form 1040   The 50% limit also applies to certain meal and entertainment expenses that are not business related. Printable tax form 1040 It applies to meal and entertainment expenses you have for the production of income, including rental or royalty income. Printable tax form 1040 It also applies to the cost of meals included in deductible educational expenses. Printable tax form 1040 When to apply the 50% limit. Printable tax form 1040   You apply the 50% limit after determining the amount that would otherwise qualify for a deduction. Printable tax form 1040 You first have to determine the amount of meal and entertainment expenses that would be deductible under the other rules discussed in this publication. Printable tax form 1040 Example 1. Printable tax form 1040 You spend $200 for a business-related meal. Printable tax form 1040 If $110 of that amount is not allowable because it is lavish and extravagant, the remaining $90 is subject to the 50% limit. Printable tax form 1040 Your deduction cannot be more than $45 (50% × $90). Printable tax form 1040 Example 2. Printable tax form 1040 You purchase two tickets to a concert and give them to a client. Printable tax form 1040 You purchased the tickets through a ticket agent. Printable tax form 1040 You paid $200 for the two tickets, which had a face value of $80 each ($160 total). Printable tax form 1040 Your deduction cannot be more than $80 (50% × $160). Printable tax form 1040 Exceptions to the 50% Limit Generally, business-related meal and entertainment expenses are subject to the 50% limit. Printable tax form 1040 Figure A can help you determine if the 50% limit applies to you. Printable tax form 1040 Expenses not subject to 50% limit. Printable tax form 1040   Your meal or entertainment expense is not subject to the 50% limit if the expense meets one of the following exceptions. Printable tax form 1040 1 - Employee's reimbursed expenses. Printable tax form 1040   If you are an employee, you are not subject to the 50% limit on expenses for which your employer reimburses you under an accountable plan. Printable tax form 1040 Accountable plans are discussed in chapter 6. Printable tax form 1040 2 - Self-employed. Printable tax form 1040   If you are self-employed, your deductible meal and entertainment expenses are not subject to the 50% limit if all of the following requirements are met. Printable tax form 1040 You have these expenses as an independent contractor. Printable tax form 1040 Your customer or client reimburses you or gives you an allowance for these expenses in connection with services you perform. Printable tax form 1040 You provide adequate records of these expenses to your customer or client. Printable tax form 1040 (See chapter 5 . Printable tax form 1040 )   In this case, your client or customer is subject to the 50% limit on the expenses. Printable tax form 1040 Example. Printable tax form 1040 You are a self-employed attorney who adequately accounts for meal and entertainment expenses to a client who reimburses you for these expenses. Printable tax form 1040 You are not subject to the directly-related or associated test, nor are you subject to the 50% limit. Printable tax form 1040 If the client can deduct the expenses, the client is subject to the 50% limit. Printable tax form 1040 If you (as an independent contractor) have expenses for meals and entertainment related to providing services for a client but do not adequately account for and seek reimbursement from the client for those expenses, you are subject to the directly-related or associated test and to the 50% limit. Printable tax form 1040 3 - Advertising expenses. Printable tax form 1040   You are not subject to the 50% limit if you provide meals, entertainment, or recreational facilities to the general public as a means of advertising or promoting goodwill in the community. Printable tax form 1040 For example, neither the expense of sponsoring a television or radio show nor the expense of distributing free food and beverages to the general public is subject to the 50% limit. Printable tax form 1040 4 - Sale of meals or entertainment. Printable tax form 1040   You are not subject to the 50% limit if you actually sell meals, entertainment, goods and services, or use of facilities to the public. Printable tax form 1040 For example, if you run a nightclub, your expense for the entertainment you furnish to your customers, such as a floor show, is not subject to the 50% limit. Printable tax form 1040 5 - Charitable sports event. Printable tax form 1040   You are not subject to the 50% limit if you pay for a package deal that includes a ticket to a qualified charitable sports event. Printable tax form 1040 For the conditions the sports event must meet, see Exception for events that benefit charitable organizations under What Entertainment Expenses Are Deductible?, later. Printable tax form 1040 Individuals subject to “hours of service” limits. Printable tax form 1040   You can deduct a higher percentage of your meal expenses while traveling away from your tax home if the meals take place during or incident to any period subject to the Department of Transportation's “hours of service” limits. Printable tax form 1040 The percentage is 80%. Printable tax form 1040   Individuals subject to the Department of Transportation's “hours of service” limits include the following persons. Printable tax form 1040 Certain air transportation workers (such as pilots, crew, dispatchers, mechanics, and control tower operators) who are under Federal Aviation Administration regulations. Printable tax form 1040 Interstate truck operators and bus drivers who are under Department of Transportation regulations. Printable tax form 1040 Certain railroad employees (such as engineers, conductors, train crews, dispatchers, and control operations personnel) who are under Federal Railroad Administration regulations. Printable tax form 1040 Certain merchant mariners who are under Coast Guard regulations. Printable tax form 1040 What Entertainment Expenses Are Deductible? This section explains different types of entertainment expenses you may be able to deduct. Printable tax form 1040 Entertainment. Printable tax form 1040   Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation. Printable tax form 1040 Examples include entertaining guests at nightclubs; at social, athletic, and sporting clubs; at theaters; at sporting events; on yachts; or on hunting, fishing, vacation, and similar trips. Printable tax form 1040   Entertainment also may include meeting personal, living, or family needs of individuals, such as providing meals, a hotel suite, or a car to customers or their families. Printable tax form 1040 A meal as a form of entertainment. Printable tax form 1040   Entertainment includes the cost of a meal you provide to a customer or client, whether the meal is a part of other entertainment or by itself. Printable tax form 1040 A meal expense includes the cost of food, beverages, taxes, and tips for the meal. Printable tax form 1040 To deduct an entertainment-related meal, you or your employee must be present when the food or beverages are provided. Printable tax form 1040    You cannot claim the cost of your meal both as an entertainment expense and as a travel expense. Printable tax form 1040    Meals sold in the normal course of your business are not considered entertainment. Printable tax form 1040 Deduction may depend on your type of business. Printable tax form 1040   Your kind of business may determine if a particular activity is considered entertainment. Printable tax form 1040 For example, if you are a dress designer and have a fashion show to introduce your new designs to store buyers, the show generally is not considered entertainment. Printable tax form 1040 This is because fashion shows are typical in your business. Printable tax form 1040 But, if you are an appliance distributor and hold a fashion show for the spouses of your retailers, the show generally is considered entertainment. Printable tax form 1040 Separating costs. Printable tax form 1040   If you have one expense that includes the costs of entertainment and other services (such as lodging or transportation), you must allocate that expense between the cost of entertainment and the cost of other services. Printable tax form 1040 You must have a reasonable basis for making this allocation. Printable tax form 1040 For example, you must allocate your expenses if a hotel includes entertainment in its lounge on the same bill with your room charge. Printable tax form 1040 Taking turns paying for meals or entertainment. Printable tax form 1040   If a group of business acquaintances takes turns picking up each others' meal or entertainment checks primarily for personal reasons, without regard to whether any business purposes are served, no member of the group can deduct any part of the expense. Printable tax form 1040 Lavish or extravagant expenses. Printable tax form 1040   You cannot deduct expenses for entertainment that are lavish or extravagant. Printable tax form 1040 An expense is not considered lavish or extravagant if it is reasonable considering the facts and circumstances. Printable tax form 1040 Expenses will not be disallowed just because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. Printable tax form 1040 Allocating between business and nonbusiness. Printable tax form 1040   If you entertain business and nonbusiness individuals at the same event, you must divide your entertainment expenses between business and nonbusiness. Printable tax form 1040 You can deduct only the business part. Printable tax form 1040 If you cannot establish the part of the expense for each person participating, allocate the expense to each participant on a pro rata basis. Printable tax form 1040 Example. Printable tax form 1040 You entertain a group of individuals that includes yourself, three business prospects, and seven social guests. Printable tax form 1040 Only 4/11 of the expense qualifies as a business entertainment expense. Printable tax form 1040 You cannot deduct the expenses for the seven social guests because those costs are nonbusiness expenses. Printable tax form 1040 Trade association meetings. Printable tax form 1040   You can deduct entertainment expenses that are directly related to and necessary for attending business meetings or conventions of certain exempt organizations if the expenses of your attendance are related to your active trade or business. Printable tax form 1040 These organizations include business leagues, chambers of commerce, real estate boards, trade associations, and professional associations. Printable tax form 1040 Entertainment tickets. Printable tax form 1040   Generally, you cannot deduct more than the face value of an entertainment ticket, even if you paid a higher price. Printable tax form 1040 For example, you cannot deduct service fees you pay to ticket agencies or brokers or any amount over the face value of the tickets you pay to scalpers. Printable tax form 1040 Exception for events that benefit charitable organizations. Printable tax form 1040   Different rules apply when the cost of a ticket to a sports event benefits a charitable organization. Printable tax form 1040 You can take into account the full cost you pay for the ticket, even if it is more than the face value, if all of the following conditions apply. Printable tax form 1040 The event's main purpose is to benefit a qualified charitable organization. Printable tax form 1040 The entire net proceeds go to the charity. Printable tax form 1040 The event uses volunteers to perform substantially all the event's work. Printable tax form 1040    The 50% limit on entertainment does not apply to any expense for a package deal that includes a ticket to such a charitable sports event. Printable tax form 1040 Example 1. Printable tax form 1040 You purchase tickets to a golf tournament organized by the local volunteer fire company. Printable tax form 1040 All net proceeds will be used to buy new fire equipment. Printable tax form 1040 The volunteers will run the tournament. Printable tax form 1040 You can deduct the entire cost of the tickets as a business expense if they otherwise qualify as an entertainment expense. Printable tax form 1040 Example 2. Printable tax form 1040 You purchase tickets to a college football game through a ticket broker. Printable tax form 1040 After having a business discussion, you take a client to the game. Printable tax form 1040 Net proceeds from the game go to colleges that qualify as charitable organizations. Printable tax form 1040 However, since the colleges also pay individuals to perform services, such as coaching and recruiting, you can only use the face value of the tickets in determining your business deduction. Printable tax form 1040 Skyboxes and other private luxury boxes. Printable tax form 1040   If you rent a skybox or other private luxury box for more than one event at the same sports arena, you generally cannot deduct more than the price of a nonluxury box seat ticket. Printable tax form 1040   To determine whether a skybox has been rented for more than one event, count each game or other performance as one event. Printable tax form 1040 For example, renting a skybox for a series of playoff games is considered renting it for more than one event. Printable tax form 1040 All skyboxes you rent in the same arena, along with any rentals by related parties, are considered in making this determination. Printable tax form 1040   Related parties include: Family members (spouses, ancestors, and lineal descendants), Parties who have made a reciprocal arrangement involving the sharing of skyboxes, Related corporations, A partnership and its principal partners, and A corporation and a partnership with common ownership. Printable tax form 1040 Example. Printable tax form 1040 You pay $3,000 to rent a 10-seat skybox at Team Stadium for three baseball games. Printable tax form 1040 The cost of regular nonluxury box seats at each event is $30 a seat. Printable tax form 1040 You can deduct (subject to the 50% limit) $900 ((10 seats × $30 each) × 3 events). Printable tax form 1040 Food and beverages in skybox seats. Printable tax form 1040   If expenses for food and beverages are separately stated, you can deduct these expenses in addition to the amounts allowable for the skybox, subject to the requirements and limits that apply. Printable tax form 1040 The amounts separately stated for food and beverages must be reasonable. Printable tax form 1040 You cannot inflate the charges for food and beverages to avoid the limited deduction for skybox rentals. Printable tax form 1040 What Entertainment Expenses Are Not Deductible? This section explains different types of entertainment expenses you generally may not be able to deduct. Printable tax form 1040 Club dues and membership fees. Printable tax form 1040   You cannot deduct dues (including initiation fees) for membership in any club organized for: Business, Pleasure, Recreation, or Other social purpose. Printable tax form 1040 This rule applies to any membership organization if one of its principal purposes is either: To conduct entertainment activities for members or their guests, or To provide members or their guests with access to entertainment facilities, discussed later. Printable tax form 1040   The purposes and activities of a club, not its name, will determine whether or not you can deduct the dues. Printable tax form 1040 You cannot deduct dues paid to: Country clubs, Golf and athletic clubs, Airline clubs, Hotel clubs, and Clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. Printable tax form 1040 Entertainment facilities. Printable tax form 1040   Generally, you cannot deduct any expense for the use of an entertainment facility. Printable tax form 1040 This includes expenses for depreciation and operating costs such as rent, utilities, maintenance, and protection. Printable tax form 1040   An entertainment facility is any property you own, rent, or use for entertainment. Printable tax form 1040 Examples include a yacht, hunting lodge, fishing camp, swimming pool, tennis court, bowling alley, car, airplane, apartment, hotel suite, or home in a vacation resort. Printable tax form 1040 Out-of-pocket expenses. Printable tax form 1040   You can deduct out-of-pocket expenses, such as for food and beverages, catering, gas, and fishing bait, that you provided during entertainment at a facility. Printable tax form 1040 These are not expenses for the use of an entertainment facility. Printable tax form 1040 However, these expenses are subject to the directly-related and associated tests and to the 50% limit , all discussed earlier. Printable tax form 1040 Expenses for spouses. Printable tax form 1040   You generally cannot deduct the cost of entertainment for your spouse or for the spouse of a customer. Printable tax form 1040 However, you can deduct these costs if you can show you had a clear business purpose, rather than a personal or social purpose, for providing the entertainment. Printable tax form 1040 Example. Printable tax form 1040 You entertain a customer. Printable tax form 1040 The cost is an ordinary and necessary business expense and is allowed under the entertainment rules. Printable tax form 1040 The customer's spouse joins you because it is impractical to entertain the customer without the spouse. Printable tax form 1040 You can deduct the cost of entertaining the customer's spouse. Printable tax form 1040 If your spouse joins the party because the customer's spouse is present, the cost of the entertainment for your spouse is also deductible. Printable tax form 1040 Gift or entertainment. Printable tax form 1040   Any item that might be considered either a gift or entertainment generally will be considered entertainment. Printable tax form 1040 However, if you give a customer packaged food or beverages that you intend the customer to use at a later date, treat it as a gift. Printable tax form 1040   If you give a customer tickets to a theater performance or sporting event and you do not go with the customer to the performance or event, you have a choice. Printable tax form 1040 You can treat the tickets as either a gift or entertainment, whichever is to your advantage. Printable tax form 1040   You can change your treatment of the tickets at a later date by filing an amended return. Printable tax form 1040 Generally, an amended return must be filed within 3 years from the date the original return was filed or within 2 years from the time the tax was paid, whichever is later. Printable tax form 1040   If you go with the customer to the event, you must treat the cost of the tickets as an entertainment expense. Printable tax form 1040 You cannot choose, in this case, to treat the tickets as a gift. Printable tax form 1040 Prev  Up  Next   Home   More Online Publications