After a recent dinner in North Carolina, Peyton Manning left a $314 tip. While the amount of the tip is more than most spend on a nice dinner out, the tip was more than 50 percent the total $625 bill.
It is unknown who Peyton shared a steak with but Manning, who was recently released by the Indianapolis Colts, but if his meal was for business purposes he may be able to deduct a portion of the meal.
Generally, 50 percent of food and beverage are allowed as a deduction for business entertaining if they are both ordinary and necessary and meet either the directly-related test or associated test.
To be directly-related, the entertainment must have taken place in a clear business setting or the main purpose was to active conduct business, business was discussed and you have an expectation of income or another business benefit.
A deduction may also be taken if the entertainment is associated with your trade or business and the entertainment occurred directly before or after a substantial business discussion.
If Peyton had the meeting with his agent or with a potential team and football was discussed, Peyton may try to deduct 50 percent of the bill including his $314 tip.
Since an 18 percent gratuity was already included in the bill, it is unlikely that the additional $200 was a “necessary” business expense.
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