Three IRS requirements for full deduction

Are you missing out on one of the easiest 100 percent deductions available to business owners? In this episode of the Main Street Business Podcast, Mark J. Kohler and Mat Sorensen break down exactly how to structure a holiday party or company event so it becomes a fully deductible business expense. From the IRS rules under Section 274 to real examples of what qualifies, you’ll learn how to turn food, entertainment, awards, and even venue costs into a legitimate write-off.

Unlike generic tax tips online, this discussion dives into real-world application for small business owners — whether you have a growing team, a handful of employees, or a small staff running from your home office. Mark and Mat explain the three requirements every event must meet, the difference between 50 percent and 100 percent deductions, why culture and team-building matter for tax purposes, and the exact documentation you need to protect the deduction. They also walk through case law, common mistakes, and creative strategies like using the Augusta rule when hosting at your home.

Whether you’re planning a Christmas party, a summer barbecue, a team-building event, or an employee appreciation night, this episode will help you use the tax code to your advantage while still creating an event your team will love. By the end, you’ll know how to design an effective, compliant, and fully deductible company party that strengthens your culture and saves you money.

 If you’re serious about maximizing deductions, staying compliant, and building a stronger business, this is an episode you can’t afford to skip.

You’ll learn:

• How to structure a company holiday party or event so it qualifies for a full 100 percent tax deduction
• The three IRS requirements under Section 274 that determine whether meals and entertainment are fully deductible
• Why team-building, culture, and employee morale play a direct role in the deductibility of company events
• The key differences between 50 percent and 100 percent deductions — and how to avoid getting stuck with the wrong one
• Real examples of deductible events, including award lunches, themed parties, off-site gatherings, and interactive team activities
• How to document business purpose properly and protect your deduction if the IRS ever asks for proof
• Creative strategies like using the Augusta rule when hosting at your home to increase deductions legally
• Common mistakes business owners make when planning events — and how to avoid losing the write-off
• When client-facing events qualify (and when they don’t) based on employee participation thresholds
• How to maximize tax benefits while still creating a memorable, effective event your tea

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