What are the limits to the travel and entertainment expenses I can deduct?

All travel and entertainment expenses are part of your overall miscellaneous expenses, which means that the 2% floor applies (so you can only deduct your miscellaneous expenses in excess of 2% of your adjusted gross income). The primary exception to this is travel expenses if you are self-employed.

In addition, for meals and entertainment, you can only deduct 50% of the relevant expenses. This 50% limit does not apply in certain limited situations, which typically arise where you are an employer.

Finally, for business gifts, you cannot deduct more than $25.