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Using different personal credit cards to pay business expenses

Using different personal credit cards to pay business expenses

Old Feb 6, 16, 11:24 am
  #1  
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Using different personal credit cards to pay business expenses

I have a side business ( sole-proprietor )with around 40k revenue per year . Because I play the credit card game, I keep having to meet minimum spends to get bonuses. So I often pay my business expenses with these personal cards.

I know tax experts say to not co-mingle personal and business expenses. For a meager 40k/year business, is the IRS really going to care? I have receipts for all my expenses. It is not like I am trying to cover anything up..

Curious to hear your thoughts.
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Old Feb 6, 16, 12:44 pm
  #2  
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The issue with commingling personal and business expenses, to IRS, is some of your expenses may deem non-tax deductible due to questionable purposes (at the minimum, a business expense has to be business related). If you can make it separate, I don't see a problem.

In term of an IRS audit, your 40K/year business does not tell much except when your gross sale proceeds and expenses are known (businesses with high ratio of expenses tend to have a higher chance of audits).
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Old Feb 6, 16, 12:44 pm
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Using different personal credit cards to pay business expenses

It's not a problem which card you use. Just keep good records. I've mixed cards for years in my businesses.
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Old Feb 6, 16, 12:45 pm
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If you're a sole proprietor, it really shouldn't matter much.
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Old Feb 7, 16, 7:49 am
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I am 100% owner of an S Corp and use personal cards all the time for business expenses. I do try to limit each card to either all business or all personal. Just makes things easier for me.
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Old Feb 9, 16, 3:23 am
  #6  
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Keep in mind that personal credit cards have far, far better consumer protections that business cards. Fair Credit Billing Act does not do much to protect business card users.

This is one big reason banks push business cards so hard.

A good policy is to use business card only until bonus spend is made and use personal cards otherwise.

With that said, there are several programs which can be use to collect activity info for many credit cards into one place for accounting purposes to separate various personal charges from business charges.

I understand Quicken can do this although I haven't tried it. Others suggest expensify.com or mint.com. No doubt, there are others.
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