Definition of Travel and Entertainment (T&E) Expenses

ordinary and necessary expenses paid while traveling away from home for a business, profession, or job. An ordinary expense is one that is common and accepted in a given field of business, trade, or profession. A necessary expense is one that is helpful and appropriate to the business. lavish or extravagant expenses are not tax deductible. See also commuting expense. Entertainment expenses are incurred for a client, customer, or employee. Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation. Examples include taking a guest to a night club; a social, athletic, or sporting club; theater or sporting event. As a result of the 1993 tax act, only 50% of entertainment expenses and business meals is deductible.