Bookkeeping tip 2 of 10 – Meals & Entertainment

You can write off 50% of your meals and entertainment if you are with someone related to your business (clients or potential clients, suppliers, or employees) – write down the names of the people that you entertained and why, and don’t forget to write in the tip amount.  Make sure that the amount is reasonable in relation to your overall income.  If your entertainment expenses are a huge percentage of your gross income, a red flag could be raised at CRA, and you could get audited.  This is a deduction that is abused, and if you are audited, be prepared to have the names on your receipts called to verify that business took place.