I am completing form 1120S for an S-Corp consulting company. Are you allowed to deduct billable business expenses such as meals & entertainment and transportation expenses? These are expenses that were ultimately invoiced and paid by the customer. Or are you only allowed to deduct non-billable business expenses?

Thank you.

“Are you allowed to deduct billable business expenses such as meals & entertainment and transportation expenses? These are expenses that were ultimately invoiced and paid by the customer. Or are you only allowed to deduct non-billable business expenses?”-----> Only actual cash out of the pocket.Nonbillable M&E expenses. I guess you may look at the 1120S from last year. This is where you find how things were reported last year; Except for schedule C, on all other business tax returns M&IEs are listed along with other expenses, e.g. line 19 on 1120S. Travel, meals, and entertainment. Subject to limitations and restrictions corporation can deduct ordinary and necessary travel, meals, and entertainment expenses paid or incurred in its trade or business Generally, the corporation can deduct only 50% of the amount otherwise allowable for meals and entertainment expenses paid or incurred in its trade or business. You need to attach a statement listing by type and amount each deduction included on this line 19