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Simple English definitions for legal terms
entertainment expense
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A quick definition of entertainment expense:
An entertainment expense is money spent on activities or events that are related to a business purpose. This type of expense can be partially tax-deductible. It is different from personal expenses, which are not tax-deductible. Examples of entertainment expenses include taking clients out to dinner or attending a business conference.
A more thorough explanation:
An entertainment expense is a cost incurred while providing entertainment that is directly related to or associated with a business purpose. This can include expenses for meals, events, or activities that are intended to promote or further a business.
For example, if a company takes a client out to dinner to discuss a potential business deal, the cost of the meal would be considered an entertainment expense. Another example would be if a company hosts a holiday party for its employees, the cost of the party would be considered an entertainment expense.
Entertainment expenses are partially tax-deductible, meaning that businesses can deduct a portion of the cost on their taxes. However, there are certain rules and limitations on what can be deducted and how much.
Overall, entertainment expenses are a common part of doing business and can help build relationships and promote growth.