Joe is a self-employed tax attorney who frequently entertains his clients at his country club.Joe's club expenses include the following: Assuming the business meals and entertainment qualify as deductible entertainment expenses,Joe may deduct
A)$2,000.
B)$4,700.
C)$5,300.
D)$4,000.

Question

Joe is a self-employed tax attorney who frequently entertains his clients at his country club.Joe's club expenses include the following:  Assuming the business meals and entertainment qualify as deductible entertainment expenses,Joe may deduct
A)$2,000. 
B)$4,700. 
C)$5,300. 
D)$4,000.

Quizplus · Accepted Answer

According to IRS guidelines, a taxpayer can deduct up to 50% of the cost of entertainment expenses that are directly related to and necessary for their business. In this case, Joe's country club expenses would qualify as deductible entertainment expenses, as he uses them to entertain his clients.

The total cost of Joe's country club expenses is $4,000. However, only 50% of this amount is deductible, which comes out to $2,000. Therefore, the best choice is A) $2,000.

Joe Is a Self-Employed Tax Attorney Who Frequently Entertains His