Three buckets
Business gifts ($25 per recipient per year cap), business meals (50% deductible with substantiation and the taxpayer present, restaurant or otherwise), and entertainment (non-deductible since 2018). Misclassification can either understate the deduction or expose you to disallowance in audit.
Tickets to events
Pre-2018 you could deduct 50% of the face value of a sporting event ticket as entertainment. After 2018, the entertainment deduction is gone. The only way to deduct event tickets is to characterize them as a business gift, capped at $25.
Meals at entertainment events
Food and beverages purchased separately (separately invoiced or contracted) at an entertainment event remain 50% deductible. Bundled food (a "skybox" package, an inclusive ticket price covering food) is non-deductible.
Promotional items vs gifts
Branded promotional items costing $4 or less are not subject to the $25 gift limit and are fully deductible as advertising. The same item costing $25.01 hits the $25 gift cap and only $25 is deductible.
Recordkeeping discipline
Each category has different substantiation rules. Maintain a small log of business gifts (date, recipient, business purpose, cost), keep meal receipts with attendees and purpose, and discard or properly categorize anything that smells like entertainment.
Common mistakes that disallow the deduction
The recurring ways this deduction gets disallowed in examination cluster in four categories: (1) personal-use expenses bundled with business (the deduction is disallowed entirely or apportioned downward); (2) inadequate substantiation (no receipt, no invoice, no business-purpose note); (3) the wrong line on Schedule C (not fatal, but it weakens audit defense); and (4) double-counting with another line (for example, deducting an expense on Schedule C and also on Form 8829, or as a personal itemized deduction on Schedule A). The fix in every case is contemporaneous bookkeeping and a clean chart of accounts.
Where this fits in the larger Schedule C picture
Schedule C has more than two dozen named expense lines plus an "Other expenses" catch-all. For most small businesses, four or five lines drive the bulk of the deduction total — vehicle, home office, depreciation, contract labor or wages, and supplies — and the remaining lines individually contribute small amounts that nevertheless add up. Treating each named line as a recurring decision rather than an afterthought, and revisiting the categories each January, often surfaces $2,000–$5,000 in additional legitimate deductions that a less disciplined process would have missed entirely.