Mark Kohler explains why regular happy hours are only 50% tax deductible, but special events with a documented business purpose, like holiday parties or structured meetings, qualify for a full 100% write-off. The key is making the event intentional and infrequent enough to count as something other than routine meals.
Chapters
When you go out once a month, maybe it happens way too often in other businesses. Every heads out to the bar after. But it's for the employees and the company's picking up the tab. You can write off 50% of that. Employee meals are 50%. That includes the bar tab. But it's not an event, it's not a holiday, it's not a structured speech with a whatever. So you can still write it off. And a lot of companies do have kind of that happy hour once a month thing on a Friday afternoon, everybody gets off an hour early. Create camaraderie, some culture, but that is only a 50% deduction. Carving out these events that are less frequent, frequent and around a special date I think is the key for that strategy.
And adding in business
purpose.
I mean, that's really the trick here is business purpose. Besides just we're not at work, we're a happy hour. Or even like the snacks in the kitchen, right? Like, or the food in the kitchen, or we brought in pizza today, you know, that's 50%. Yeah, because it's really just here's some food or here's some drinks, you know, or food. But if it's centered around a meeting and business purpose, where now the food is there, now that food becomes 100% write off.
