Don’t Miss This Beginning Business Deduction


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1-12-2011

Until you get your business credit going, you are probably going to need to use your personal credit card to pay for business purchases. It’s not ideal, but it’s often a fact of life when you’re first starting out. As soon as possible, get your business its own card.

Until your business has its own credit card, follow these six steps if you use your personal business card:

  • Keep copies of receipts whenever the personal card is used for business purposes.
  • When you receive your monthly statement, or print it out from a website, highlight the business expenses.
  • Submit an expense report to your business from you, as an employee and/or owner.
  • Attach a copy of the statement with the business expenses attached as well as the store receipts.
  • Total the reimbursement amount.
  • Business writes you a check for this, as a reimbursement of expenses.

Keep a very clear audit trail any time that you combine personal and business expenses. And, as soon as possible, stop the practice. This could seriously jeopardize your asset protection plan down the road.

This is just one of the hundreds of tips in Smart Business Stupid Business. Pick up your copy while the Smart Business Smart Investment 2 for 1 Special still lasts!



One Comment

  1. Clint says:

    One suggestion would be to use Mint.com to manage all your accounts. This way you can actually make notes on all business transactions done with personal accounts.

    In addition, you can categorize them all in accordance with where they would go on either a Schedule C, Schedule E or K-1.

    For example I used a personal credit card to buy a new office phone. Mint.com automatically keeps a statement and I went in and added a Note “New Office Phone” and categorized it as “Office Equipment”. This way when we file our return it will be easier and it is also something we advise our clients on.

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