Business Credit Card Spending Report to IRS?
Aug 14, 13, 10:00 am
#1
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Join Date: Jul 2013
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Business Credit Card Spending Report to IRS?
I recently got the Ink Plus Business Card to get the sign up bonus. I just listed my business as "my name LLC" and used my ssn, I never even got a tax ID. A friend of mine told me I have to report my credit card spending on business cards to the IRS. Is this true? What are the implications if I report I spent ~5K without any income?
Aug 14, 13, 10:08 am
#2
Join Date: Jun 2011
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If your friend said it. It must be true. I would recommend talking to an accountant about it. If you spend 5,000 and don't make any income, that sounds like a loss to me.
***To the extent that this post contains tax advice, such advice is not intended to be used, and may not be used for the purposes of avoiding federal tax penalties.
The information on this post is provided solely for general illustration and instructional purposes and does not create a business or professional services relationship. Laws and regulations vary by jurisdiction and change from time to time; compliance with such standards depends on the particular circumstances. Any reliance on the information is solely at the user's own risk.
Before making tax or business decisions, please consult your Tax Adviser directly. The author of this post cannot provide any warranty about the accuracy or source of information found on any of his posting commentary.
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***To the extent that this post contains tax advice, such advice is not intended to be used, and may not be used for the purposes of avoiding federal tax penalties.
The information on this post is provided solely for general illustration and instructional purposes and does not create a business or professional services relationship. Laws and regulations vary by jurisdiction and change from time to time; compliance with such standards depends on the particular circumstances. Any reliance on the information is solely at the user's own risk.
Before making tax or business decisions, please consult your Tax Adviser directly. The author of this post cannot provide any warranty about the accuracy or source of information found on any of his posting commentary.
All trademarks referred to on this post are the properties of their respective owners. Except where otherwise noted.
Aug 14, 13, 11:12 am
#3
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Thread transferred to Credit Card Programs forum because it is of general interest and not specific to manufactured spending.
Friends and internet forums are not the best source of tax advice. Applying for a "business" credit card does not create a business. Even if you have a business, transactions on a "business" credit card are not necessarily related to that business. The label that the issuer attaches to a credit card is not as important as how the card is actually used.
For an introduction to what you would need to report, start here:
http://www.irs.gov/taxtopics/tc407.html
Friends and internet forums are not the best source of tax advice. Applying for a "business" credit card does not create a business. Even if you have a business, transactions on a "business" credit card are not necessarily related to that business. The label that the issuer attaches to a credit card is not as important as how the card is actually used.
For an introduction to what you would need to report, start here:
http://www.irs.gov/taxtopics/tc407.html
Aug 14, 13, 11:20 am
#4
Join Date: May 2002
Location: St Louis, MO
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I recently got the Ink Plus Business Card to get the sign up bonus. I just listed my business as "my name LLC" and used my ssn, I never even got a tax ID. A friend of mine told me I have to report my credit card spending on business cards to the IRS. Is this true? What are the implications if I report I spent ~5K without any income?
If it ever comes to an audit, they just want you to be able to prove you spent the money. Be it cash, check or credit card.
Aug 14, 13, 8:42 pm
#5
Join Date: Apr 2008
Posts: 2,358
I recently got the Ink Plus Business Card to get the sign up bonus. I just listed my business as "my name LLC" and used my ssn, I never even got a tax ID. A friend of mine told me I have to report my credit card spending on business cards to the IRS. Is this true? What are the implications if I report I spent ~5K without any income?
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The Internal Revenue Code that pertains to credit card reporting does not include the credit card type transactions you described. Even if they did, there is an annual $20,000.00 exemption or 200 transaction each year.
Take a look at this IRS site then you will feel better and stop worrying:
http://www.irs.gov/Businesses/New-10...ement-Entities
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Aug 14, 13, 10:17 pm
#6
Join Date: Jul 2013
Posts: 21
Im a tax professional and did prepared thousand of tax returns in years. If you do have a business expenses on your credit card, and its legit or you have a business expenses without income, you should get lil bit more refund if you do it the right way. But be sure to keep all the receipt and credit card statement to back up in case IRS audit you.
Aug 14, 13, 10:37 pm
#7
Join Date: Apr 2008
Posts: 2,358
Im a tax professional and did prepared thousand of tax returns in years. If you do have a business expenses on your credit card, and its legit or you have a business expenses without income, you should get lil bit more refund if you do it the right way. But be sure to keep all the receipt and credit card statement to back up in case IRS audit you.
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The original poster was not asking for tax advice or about business expenses.
He was concerned about a new requirement and the Form 1099K that came into existence only a couple of years ago. The form has to do with income, not deductions.
Again, check out the site I provided as it will relieve any concerns expressed by the original poster or concerns others might have over having credit card payments received by a business.
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Oct 24, 17, 1:00 pm
#8
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I recently got the Ink Plus Business Card to get the sign up bonus. I just listed my business as "my name LLC" and used my ssn, I never even got a tax ID. A friend of mine told me I have to report my credit card spending on business cards to the IRS. Is this true? What are the implications if I report I spent ~5K without any income?
Oct 24, 17, 11:20 pm
#10
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Long story short - the credit card is the mode of payment, similar to cash, checks, etc. Using a business card has nothing to do with the IRS.
On the other hand, spending on personal cards may need to be reported to the IRS depending on the circumstance.
No business = no business expense = no deduction.
Hopefully, you have some good friends. Because what you have said is definitely not true at all.
When you do your taxes and you report your expenses , you don't report what spending you put on your "business credit card". You report the EXPENSES themselves. It doesn't matter how you paid for them. They don't even have a section for "expenditures on your business credit card"
If it ever comes to an audit, they just want you to be able to prove you spent the money. Be it cash, check or credit card.
If it ever comes to an audit, they just want you to be able to prove you spent the money. Be it cash, check or credit card.
Form 1099-K targets taxpayers using platforms like PayPal, Amazon Payment, etc. who RECEIVE payments. OP's issue is about using the credit card to PAY.
Oct 26, 17, 10:15 pm
#11
Join Date: Nov 2015
Posts: 12
I was wondering this same thing. However, the OP seems to be concerned with opening a biz card without a biz. What repercussions are actually a potential risk, and what IRS form can be filled to alleviate that risk? I think that is basically what the OP wants to know. I don't have any idea what the answer would be, though.
Oct 27, 17, 3:46 am
#12
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EIN is what identifies a company.
I was wondering this same thing. However, the OP seems to be concerned with opening a biz card without a biz. What repercussions are actually a potential risk, and what IRS form can be filled to alleviate that risk? I think that is basically what the OP wants to know. I don't have any idea what the answer would be, though.
