Expenses incurred by a business for employee travel and entertainment that are ordinary and necessary in carrying on a trade or business. Certain IRS regulations apply in order to be able to deduct travel and entertainment expenses for tax purposes. For example, only 50% of food, beverage, and entertainment expenses are generally permitted as deductions. Reimbursed travel and entertainment expenses incurred by an employee are not included in wages and cannot be deducted. Unreimbursed expenses by an employee are generally permitted as an itemized deduction, subject to the 2% adjusted gross income limit.