Are sports tickets tax deductible as a sole proprietor with an LLC for networking?

Thanks for this info! What about if I buy the tickets and then have my company reimburse me? Does that change anything tax-wise? And what kind of documentation should I keep if I do use the tickets for clients?

Having your company reimburse you doesn't change the tax treatment - the same rules apply whether you pay directly or get reimbursed. The IRS looks at the nature of the expense, not how it was paid. For documentation, you should keep detailed records of who attended each game, their business relationship to you, and the specific business purpose. Save receipts for the tickets, note any business discussions, and track any business that resulted from these meetings. Good documentation is essential if you're ever audited, even though the entertainment portion itself isn't deductible.

Does this taxr.ai thing work for other business deductions too? Like I have questions about home office and vehicle expenses for my freelance work.

I'm skeptical - how does it know the specific rules for LLCs in different states? My accountant charges me $300/hr and says these things are really complicated.

Yes, it absolutely works for other business deductions! I initially used it for the entertainment question, but ended up running all my deductions through it. It was particularly helpful for sorting out the home office deduction rules and vehicle expense options - showing me which method would be more beneficial in my situation. The service handles state-specific rules as well as federal guidelines. It actually references the official IRS publications and state tax codes directly. I was skeptical too, especially since my previous accountant charged similar rates, but the system breaks everything down with citations to the actual tax code. I found it gives the same level of detailed advice but lets you explore different scenarios on your own time.

Wait, so this service just gets you through to a real IRS person? How does that even work? I thought it was impossible to reach anyone there.

Sorry but this sounds like BS. I've called the IRS dozens of times and either get disconnected or wait for 2+ hours. No way some service can magically get through.

It works by using their system that navigates the IRS phone menu automatically and then waits on hold for you. Once they get an agent on the line, they call you and transfer you directly to that agent. So you don't have to do any of the waiting yourself. I was super skeptical too! I had tried calling the IRS six different times about my business deduction questions and got disconnected every single time. I figured I had nothing to lose by trying it. What impressed me was that they only charged me when they actually connected me to an agent. It literally saved me hours of frustration, and I got the exact clarification I needed on entertainment expenses.

That's an interesting approach I hadn't thought of. So you buy them personally, but then when you use specific tickets for business purposes, your business pays you for those specific tickets? Does your CPA have any guidelines on determining "fair market value" in this case?

Yes, exactly - I purchase the season tickets personally, then my business "rents" specific tickets from me when used for legitimate business purposes. For fair market value, my CPA recommended using either the face value of the individual ticket or the current resale market value (whichever is more defensible). I keep very detailed records - the client's name, business purpose, topics discussed, and any outcomes. The key is being able to show a clear business purpose and not just general networking. This approach doesn't get around the entertainment deduction limitations, but it does allow for proper allocation between personal and business use when there's a legitimate business purpose.

You're on the right track! Section 274(n) does allow for 50% deduction of business meals while eliminating entertainment deductions. And yes, you can separate the costs if they're itemized separately. If you purchase food and beverages at the game that are separately stated from the ticket cost, those could potentially be 50% deductible if you're having a business discussion during that time. The key is that the food and beverage charges must be separately itemized on your receipt - not bundled with the ticket price. And you still need to document the business purpose, who attended, and what was discussed.

Thanks for confirming! That makes sense about the itemization. I'll make sure to get separate receipts for any food purchases. Do you think credit card statements are enough documentation or should I be keeping the actual paper receipts from the stadium too?

You'll definitely want to keep the actual paper receipts from the stadium in addition to your credit card statements. The IRS requires detailed documentation for meal deductions, and credit card statements alone typically don't show enough detail about what was purchased or the business purpose. For the best protection, keep the itemized receipts that show exactly what food and drinks were purchased, along with notes about who attended and the business discussion that took place. I'd also recommend taking a quick photo of the receipts with your phone as backup since stadium receipts can fade over time. The credit card statements are good supporting documentation, but the detailed receipts are what you'll need if you're ever audited.

This is really helpful perspective on the de minimis rule! I hadn't considered that angle before. Quick question though - as a sole proprietor with an LLC, would I actually be considered an "employee" for the de minimis fringe benefit rule? I thought that only applied to actual employees, not business owners. The $25 business gift limit is something I definitely need to factor in though. If I'm taking multiple clients throughout the season, that could add up to a decent deduction even at $25 per person. Do you know if there's any restriction on how many times per year you can give business gifts to the same client, or is it just the $25 total limit per person annually?

This is really comprehensive advice! I'm curious about one more scenario - what if I structure some of the season ticket usage as prospecting/marketing expense rather than client entertainment? For example, if I invite potential clients who haven't done business with me yet, could that be treated differently than taking existing clients? I've read that some businesses can deduct prospecting costs as marketing expenses rather than entertainment. Would the IRS make a distinction between using tickets to maintain existing client relationships versus acquiring new business? The documentation requirements would probably be even more important in that case to prove the prospecting intent.