Summertime Parties – Tax Deductible?

by in Tax Issues

Summertime and the livin’ is easy…George & Ira Gershwin’s lyrics  and music from Porgy and Bess evoke the sensuality of a long, hot and passionate summer. Listen to Ella Fitzgerald. Can you feel it? Mmmmm….

Great background for a summer party. OK, perhaps an adult party. Well, this is the time of year we start gearing up for the backyard barbeques, picnics and beach parties. Some are simple pot lucks, everyone pitching in with food, goodies and fun. Those are fun, don’t cost much – and aren’t really going to be tax deductible.

But what about the more expensive parties? Well, next month, I’ll be in Las Vegas at Caesar’s Palace, throwing a dinner party for my friends. The cost will be in the low 5 figures, and will be fully deductible. Why? It’s tied to a tax conference. The invitees are TaxMama’s students, readers, friends and their guests. And if even one of those people bring along a friend who signs up for my EA Exam Review class – the party is nearly paid for.  In fact, several of the ‘guests’ have turned into students and passionate fans – and friends.

OK, so you’re not going to Vegas just to write off a party. How can you go about writing off a party in your own home or area?

Make the party a sales pitch for your business or product, or the affiliate program(s) you represent. Tupperware was famous for their sales parties. Then came the lingerie parties. Sports fans can host fantasy sports parties. You can hold read-a-thons for children, or play time with toys from affiliate programs.  Even back to school parties.

Let your imagination run wild. What kind of blatant marketing party can you throw – including prizes (samples of product) for participation – and for levels of purchases – or for new recruits.

What about the cost of spouses and children coming to such parties? Frankly, when it comes to network marketing programs, spouses and children are often fully involved. Exposing them to these experiences makes them aware of the products. And it gives them something to talk about to their friends as well.

Why do you think millions of dollars worth of advertising budgets are targeted towards children? Children are intense consumers. They exert a powerful influence on their parents’ buying habits.

What can you write off at such parties?

The products you consume from your inventory, naturally. The costs of food, beverages and any special entertainment to enhance the mood. The decorations. The invitations.

If you hold one marketing party each month, you’ll not only have a great time, you’ll meet new contacts, make new friends, and increase your sales.

What kinds of parties should you not expect to write off?

Weddings, bar mitzvahs, confirmations, graduations, Quinceañeras, etc. These are purely social or religious. IRS has a lot of experience with people trying to write off such parties.

How could you get away with it? Turn it into a training event or seminar that people pay to attend. Remember Corey Rudl? He did. Here are some more tips on writing off weddings and such.

Have a lovely, fun and profitable summer!

About the Author - Eva Rosenberg

Eva Rosenberg, EA, founder of the popular tax advice site, www.TaxMama.com, is a nationally syndicated Dow Jones columnist at MarketWatch.com, an author and popular speaker and instructor. Please join the TaxMama family and get answers to your own tax questions.

 

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