Business Travel, Meals, and Entertainment: What’s Deductible in 2025?
One of the most common questions business owners and employees ask is: “What can I deduct for travel, meals, and entertainment next year?” With tax laws evolving and the IRS tightening its definitions, it’s crucial to stay informed and compliant. Here’s what you need to know for 2025.
Business Travel: Still Deductible, with Requirements
Most business travel expenses remain largely deductible, provided they meet IRS criteria. This includes airfare, lodging, transportation (like Uber or rental cars), and incidental costs such as baggage fees and Wi-Fi.
The trip must be primarily for business and take place away from your tax home
Expenses must be ordinary and necessary
Keep detailed documentation: receipts, dates, business purpose, and attendee names
Tip: Use the IRS per diem rates for meals and lodging to simplify reimbursements. These rates vary by location and are updated annually.
Meals: Mostly 50% Deductible, with Exceptions
The IRS allows a 50% deduction for business meals if:
The meal is directly related to business
The taxpayer or employee is present
The expense is not lavish or extravagant
100% Deductible Exceptions:
Meals provided to the public (e.g., open house events).
Snacks and coffee are considered “de minimis fringe benefits.”
Meals are provided on the employer’s premises for their convenience.
Reimbursed Meals, when billed separately and fully accounted for.
Meals are included in charitable sports events or fundraising activities.
Important Note: Reimbursed meals under an accountable plan aren’t taxable to employees if the business purpose is documented, expenses are substantiated within 60 days, and any excess reimbursement is returned
Entertainment: No Longer Deductible
Since the Tax Cuts and Jobs Act (TCJA), entertainment expenses—like concert tickets, golf outings, or sporting events—are not deductible, even if business is discussed during the event.
What’s Not Deductible:
Club memberships
Season tickets
Recreational activities
What’s Still Deductible:
Meals during entertainment events, if separately stated on the invoice.
Documentation Is Everything
Whether you're reimbursing employees or claiming deductions directly, the IRS expects clear documentation:
Receipts
Names of attendees
Business purpose
Dates and locations
Final Thoughts
Navigating deductions for travel, meals, and entertainment requires a blend of strategic planning and meticulous recordkeeping. As your Trusted Advisor, KerberRose recommends:
Reviewing your expense policies annually
Training staff on proper documentation
Consulting with your CPA before year-end to maximize deductions
If you have questions or want to review your current expense strategy, let’s schedule a time to talk.
Tony Powers, AIF®, CFP®, CRPS® Shareholder
Tony Powers, President of KerberRose Wealth Management, has more than 20 years of experience in the financial services industry. He specializes in helping private and public sector employers set-up and manage their employee retirement plans. Tony provides Fiduciary Services and Support, Plan Design Consultation, Plan Benchmarking and Financial Wellness.