A staff holiday party belongs on Line 24b, deductible meals.
Why line 24b
An occasional recreational or social event held primarily for the benefit of your employees, a holiday dinner or a summer barbecue, escapes the 50 percent limit and is deductible in full. The food and drink part reports on line 24b at its full cost rather than half, and venue or entertainment costs for the same event are itemised in Part V on line 27a. Two conditions carry the treatment: the event must be occasional rather than a standing perk, and it must be primarily for employees generally rather than for owners and highly compensated staff.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so a staff holiday party lands on Line 24b without you sorting it.
Start for freeWhat a staff holiday party is confused with
- Line 14, employee benefit programs
- Line 14 covers employee benefit programs such as health plans, group-term life and dependent care; a party is an occasional social event, not a benefit program.
- Line 27a, other expenses
- The food and drink go on line 24b at full cost; the venue hire, the band and the decorations for the same staff event are itemised in Part V on line 27a.
- not deductible, not deductible
- If the guest list is really the owner, family and clients rather than the staff, it is not an employee event and the entertainment part is not deductible at all.
Examples that belong on line 24b
- $640 of food and drink at a December staff dinner for nine people
- $210 of catering at an annual summer barbecue for the crew
- $180 of venue hire for the same party, itemised on line 27a
- $95 of drinks at a one-off team celebration after a large project
- $60 of food at a staff event where employees brought partners
What does not belong here
- A monthly team dinner treated as an occasional event, which is a standing perk at 50 percent.
- A party whose real guest list is clients, which is entertainment.
- The owner's own family celebration run through the business.
- Cash bonuses handed out at the party, which are payroll on line 26.
The limit that applies
Not subject to the 50 percent meal limit when the event is occasional and primarily for the benefit of employees generally.
What to keep
Keep the invoice with the headcount and the date, and note that the event was for employees. Because this is an exception to the 50 percent limit, the record of who attended is what justifies the full deduction.
Other expenses on line 24b
| Expense | Line |
|---|---|
| a coffee meeting | Schedule C, Line 24b |
| a meal at a conference | Schedule C, Line 24b |
| a team meal for employees | Schedule C, Line 24b |
| lunch with a client | Schedule C, Line 24b |
| your own meals while traveling overnight | Schedule C, Line 24b |
Related lookups
- Where does employee health insurance go on Schedule C?
- Where do client gifts go on Schedule C?
- Is a car payment deductible on Schedule C?
Sources
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so a staff holiday party lands on Line 24b without you sorting it.
Start for free