Small Business Owners: Charging your own credit card?
#1
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Small Business Owners: Charging your own credit card?
If any of you are small business owners, do you sometimes "charge" your own credit card just to get some extra miles?
The charge would then be recorded as "Loan from Shareholder" on your business's books, and then be repaid to "you" with a cheque or by cash.
The charge would then be recorded as "Loan from Shareholder" on your business's books, and then be repaid to "you" with a cheque or by cash.
#2
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I am sure some may do it,but I would not try it.You will find that it is against the terms of your merchant agreement with your processor.
I am sure it would be hard to track but I would not want to have my merchant account canceled for it.
I will be interested to hear what others have to say.
I am sure it would be hard to track but I would not want to have my merchant account canceled for it.
I will be interested to hear what others have to say.
#3
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it would probably violate your merchant agreement, but you could use another person as a conduit.
the problem with the theory is the transaction charges. You would end up losing 1.5%-2.5% of everything you charged through the merchant account. It might only be worthwhile with a double or triple mile promos...you need to work the numbers to see if it's worthwhile, otherwise you could end up spending $3000 for 2 FC tickets to Hawaii in transaction and finance charges.
the problem with the theory is the transaction charges. You would end up losing 1.5%-2.5% of everything you charged through the merchant account. It might only be worthwhile with a double or triple mile promos...you need to work the numbers to see if it's worthwhile, otherwise you could end up spending $3000 for 2 FC tickets to Hawaii in transaction and finance charges.
#4
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by daniellam:
The charge would then be recorded as "Loan from Shareholder" on your business's books, and then be repaid to "you" with a cheque or by cash.</font>
The charge would then be recorded as "Loan from Shareholder" on your business's books, and then be repaid to "you" with a cheque or by cash.</font>
Sometimes people go way too far for miles.
#5
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For business travel costs that are directly reimbursible, I charge on my own cards, and ask my clients to send a check made out to myself, rather than the business.
That way, I don't have to do as much paperwork for my business.
That way, I don't have to do as much paperwork for my business.
#6
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Why limit it just to businesses? Just about anybody can get an internet merchant account over at a place like 2checkout.com and the others, and just pay the transaction fees (and $49 one time setup). Set up a one item store and charge away. Of course it's a 5.5% fee to do that, with a 45 cent fee per transaction, but you get the miles.
#7
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What if you work for Amex and have a corporate Amex card that earns miles into your own account?
Let's see how silly we can get with this?
Let's see how silly we can get with this?
#8
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Nah, I just use my personal credit card for business purchases and then have the company write the card issuer the check at the end of the billing cycle. I know, I know, that's not what you meant.
#9
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by sowalsky:
What if you work for Amex and have a corporate Amex card that earns miles into your own account?</font>
What if you work for Amex and have a corporate Amex card that earns miles into your own account?</font>
#10
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by PETEFLYS:
I am sure some may do it,but I would not try it.You will find that it is against the terms of your merchant agreement with your processor.
I am sure it would be hard to track but I would not want to have my merchant account canceled for it.
I will be interested to hear what others have to say.</font>
I am sure some may do it,but I would not try it.You will find that it is against the terms of your merchant agreement with your processor.
I am sure it would be hard to track but I would not want to have my merchant account canceled for it.
I will be interested to hear what others have to say.</font>
bocasteve is also right, you dont want to fork out 3000 for 2 FC tix...you want to do it in a sweet deal....I found it only works well with 2x or 3x point promos....amex has always traditioanlly charged a higer discount rate to merchants....for us example, our client base uses very little amex 5% of our credit card sales are amex...very little...so our discount rate matches that amount of volume....now we do 80% with visa...so I have room to negotiate with them....with our rate so high with amex...I would buy my own miles in the discount rate process...
pgalore....for business travel costs that are directly reimbursible, I charge on my own cards, and ask my clients to send a check made out to myself, rather than the business.
That way, I don't have to do as much paperwork for my business. ....
would you please go in to a little more details about this...kinda interested...
Ric
#11
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Hi RCC,
I have the clients that I do work for write a check or direct deposit reimbursements for travel costs to my personal account, rather than my business checking account.
Since I charge the costs directly on my personal cc and they are pass-through costs, i don't have to have my business be involved. Also, I'm an employee of my business as well (S Corp).
You shouldn't be getting 1099s for these reimbursements either, since they are pass-through.
Much easier this way, IMHO.
[This message has been edited by pgalore (edited Feb 10, 2004).]
[This message has been edited by pgalore (edited Feb 10, 2004).]
I have the clients that I do work for write a check or direct deposit reimbursements for travel costs to my personal account, rather than my business checking account.
Since I charge the costs directly on my personal cc and they are pass-through costs, i don't have to have my business be involved. Also, I'm an employee of my business as well (S Corp).
You shouldn't be getting 1099s for these reimbursements either, since they are pass-through.
Much easier this way, IMHO.
[This message has been edited by pgalore (edited Feb 10, 2004).]
[This message has been edited by pgalore (edited Feb 10, 2004).]
#12
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by pgalore:
...You shouldn't be getting 1099s for these reimbursements either, since they are pass-through.</font>
...You shouldn't be getting 1099s for these reimbursements either, since they are pass-through.</font>
If payment is to a corporation, there is no 1099 at all.
Reimbursed travel expenses are not reportable only for reimbursement of employees by their employer.
#13
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"If payment is to a corporation, there is no 1099 at all."
Then how would the IRS know how much I was paid as a consultant? Consultants who have their own corporations are issued 1099 forms just as sole proprietors are.
However, my clients do not add the travel costs into the 1099s they issue to me. Maybe your clients are different. I'm not an accountant, so I can't explain why some may do this and some may not.
Then how would the IRS know how much I was paid as a consultant? Consultants who have their own corporations are issued 1099 forms just as sole proprietors are.
However, my clients do not add the travel costs into the 1099s they issue to me. Maybe your clients are different. I'm not an accountant, so I can't explain why some may do this and some may not.
#14
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by pgalore:
Consultants who have their own corporations are issued 1099 forms just as sole proprietors are.</font>
Consultants who have their own corporations are issued 1099 forms just as sole proprietors are.</font>
#15
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by MikeLaw:
Not by companies that know what they are doing. Corporations are specifically exempted from 1099-MISC reporting with a few exceptions.</font>
Not by companies that know what they are doing. Corporations are specifically exempted from 1099-MISC reporting with a few exceptions.</font>
The IRS will obviously know when it gets a 1099-MISC if it's for a corporation, based on the EIN. I don't know if it just ignores those that it gets for corporations, or if these are somehow compared to the corporate tax return like they are for individuals.
[This message has been edited by Steve M (edited Feb 11, 2004).]