No need to hold back on the holiday office party if cost is the only thing stopping you: It’s entirely tax-deductible, as long as everyone’s invited. Under tax code section 274(e)(4), 100 percent of the expenses for recreational or social activities or facilities benefiting all employees can be written off.
But there is a caveat. According to Bloomberg Tax, the event or activity can’t only be for highly paid employees, which the IRS defines as those making more than $120,000. In 2019, the threshold rises to $125,000. For guidance on holiday festivities, click here.