It's not illegal to use your business credit card for personal use or personal credit cards for business use. It might be against your credit card terms and conditions to use your business credit cards for personal use. It's illegal to claim personal use as a (write off) on your taxes. Mixing the two can make it more difficult to manage during tax season. But if you pay only business expenses with your business checking account and identify personal expenses by separating payment methods your be fine. It's not illegal. Most bank don't check as long as you're paying. People will buy your business for the established customer base and credit line as valuable assets. It could be more valuable than account receivables. Official offer might be lower than you hope.
That's the way I understand it too. If you take advantage of a low interest rate credit card to make a large personal expense and then categorize it as a personal expense you've effectively separated your personal expenses from your business expenses.
It can also be used to pierce the corporate veil. Someone trying to sue your company might try to claim that your LLC is in name only and is not a separate legal entity from yourself because you freely mingle your personal and business transactions. Therefore, they can come after your personal assets as well as the company’s assets.
@@kesayo it's harder than you think to combine both liabilities (personal and business) just by using a credit cards. Lots of businesses are home based. That doesn't combine veil either. The transactional evidence needs to be more. Hopefully your small business isn't causing transaction problems that your personal assets valuation are needed to cover business expenses. If so - you definitely need to reevaluate your business and management skills. A good way of doing so is by looking at your Experian Business stability risk rating. If it's greater than 3 you might want a different SIC code or business. Bottom line, businesses get sued, your company should be able to cover its expenses (insurance / cash on hand). Business Management 101 know the nature of your business. Again if you categorize your personal expenses from your business expenses doing taxes your safe. Nearly using the wrong credit card or checking account isn't enough.
So the big question I have is "what if you are NOT requesting a tax deduction on these personal items and you are paying the personal expenses with your personal account?" And this is on a SINGLE MEMBER LLC that has no income yet and that's trying to meet welcome offer only for first 3 months.
Are you using accounting software? Don’t use excel to track your costs-it’s not double entry bookkeeping. On the personal transactions charged, book them to owner distribution equity GL account. On the payment from your personal checking account to the business credit card, book them to owner contribution equity GL account. Both are balance sheet accounts so they don’t affect your profit loss report. Another option is to create an account called “loan due to / from blezz3d” and this account can be a liability account. You can dump your personal charges and payments into here. You can use this to keep track how much you owe the business and make sure the payments you make cancel each other to net out to $0 in the end. This is also a balance sheet account so it doesn’t affect your profit loss report either.
Well i dont have business deductions and have business cards. (Uber driver) how can irs audit me? I dont put anything on deductions just regular w2 and 1099 ..
Some people can’t afford to do certain things so I think the reason they do this is for credit cards so they can get miles or points with those credit cards.
If you are a CPA and you don’t advise your clients about the consequences of expensing personal items as business expenses, your going against the code of ethic of our practice. You can’t tell people “Do it it’s ok! , the chances of getting audited are 1%” either. It’s not very ethical nor professional from you to provide this type of financial advice to your business clients.
I agree with you. However when I had complained to a CPA that I was doing bookkeeping for my ex-coworker and she was writing all sorts of personal expenses in her business and asked this CPA for advice on how to handle it, the CPA told me ultimately this coworker was responsible for her actions because she knew full well what she was doing and doing it with a smile on her face. I don’t personally agree with people doing it and the moment I catch a business owner client pulling this like this, I say BYE BYE contract terminated.
When you hire a bookkeeper, you’re delegating. Your bookkeeper is going to assume every single expense on your business card is a business expense. Sure you can do it when you’re doing your own books because you know what you spent your money on and what was personal and what wasn’t. But will your bookkeeper know that? No. People want to form a business so they can walk away and become financially independent, otherwise it’s just another job, except you have 10+ bosses because every client becomes your boss. Once you have a team handling this kind of stuff, this isn’t going to fly. Imagine running a 200 team and you need to tell your bookkeeper every single day, hey I just bought this personal on my business card. What a waste of your precious time that could be spent on running the business better. Plus, the point of forming an LLC or Inc is to protect your personal assets in a lawsuit. Mingling personal and business? You are opening yourself up for trouble when the court wants docs. You can do what you want. Most people aren’t going to follow what I say. Only 1% of people actually looking to grow and scale their business up will see the true value and benefit in my advice here.
The practice is endemic among business owners and the topic is worth discussing frankly as you have here. There is much more to discuss among related topics of ethics like paying with cash and disappearing receipts. Other than the porn and influencer businesses, tatoos could be a business expense for musicians going after a brand or casting companies inking staff for an event. Nice video editing with transition and watermarking!
What if I have a business card with a bonus cash offer if a certain spending threshold is reached in the first 3 months? Couldn't I just use it for all my purchases during the first 3 months to meet the threshold to receive a bonus, then later weed out the personal transactions when I'm doing my taxes?
So Ive started my own llc while I’m still employed under a big corporation, both being construction trucking and labor. This corp reimburses purches such as fuel for company trucks, parts and supplies. I’ve been thinking about getting a business credit card for work to build business credit before I actually break away and start my own business. Not looking to write anything off or steal money just build credit using my own business credit card rather than a personal credit card that my current employer will reimburse anyways.
Its not illegal. Doesn’t matter what kind of credit card you are using to get reimbursed by your employer. What matters is how your bookkeeping is done for your LLC but you’re not doing bookkeeping anyway because youre doing it for reimbursement as an individual employee of a corporation.
So my question is, I'm starting a business. I need to travel across the country to produce content. I might just move there for 3 to 6 months. So can I use my business card to rent say a short-term apartment? If I can, write it off, great. If not, that's fine. Not doing it for tax reasons. I just think it would be easier to take that money from my business side vs personal.
Since it’s for your business I would charge the rent as business to keep track of it. But how much of that is deductible you need to ask a tax accountant.
Don't sleep on it... this is a time to invest i recently just bought another property valued at over $10m. I wish I knew the right investment firm to invest with earlier, better late than never thought
I agree with you and I believe that the secret to financial stability is having the right investment ideas to enable you earn more money, I don't know who agrees with me but either way I recommend either real estate or crypto and stocks.
It is your business to tell business owners this information. You are part of this practice which you say is illegal. You staying silent on this matter and speaking on it here makes it hard for me to listen to you.
It's not illegal to use your business credit card for personal use or personal credit cards for business use. It might be against your credit card terms and conditions to use your business credit cards for personal use. It's illegal to claim personal use as a (write off) on your taxes. Mixing the two can make it more difficult to manage during tax season. But if you pay only business expenses with your business checking account and identify personal expenses by separating payment methods your be fine. It's not illegal. Most bank don't check as long as you're paying. People will buy your business for the established customer base and credit line as valuable assets. It could be more valuable than account receivables. Official offer might be lower than you hope.
18 USC ss8 seems like all obligations are to be paid by the US Treasury
@@ElWisdom Elaborate what the code refrains too or what it limits?
That's the way I understand it too. If you take advantage of a low interest rate credit card to make a large personal expense and then categorize it as a personal expense you've effectively separated your personal expenses from your business expenses.
It can also be used to pierce the corporate veil. Someone trying to sue your company might try to claim that your LLC is in name only and is not a separate legal entity from yourself because you freely mingle your personal and business transactions. Therefore, they can come after your personal assets as well as the company’s assets.
@@kesayo it's harder than you think to combine both liabilities (personal and business) just by using a credit cards. Lots of businesses are home based. That doesn't combine veil either. The transactional evidence needs to be more. Hopefully your small business isn't causing transaction problems that your personal assets valuation are needed to cover business expenses. If so - you definitely need to reevaluate your business and management skills. A good way of doing so is by looking at your Experian Business stability risk rating. If it's greater than 3 you might want a different SIC code or business. Bottom line, businesses get sued, your company should be able to cover its expenses (insurance / cash on hand). Business Management 101 know the nature of your business. Again if you categorize your personal expenses from your business expenses doing taxes your safe. Nearly using the wrong credit card or checking account isn't enough.
So the big question I have is "what if you are NOT requesting a tax deduction on these personal items and you are paying the personal expenses with your personal account?" And this is on a SINGLE MEMBER LLC that has no income yet and that's trying to meet welcome offer only for first 3 months.
Are you using accounting software? Don’t use excel to track your costs-it’s not double entry bookkeeping. On the personal transactions charged, book them to owner distribution equity GL account. On the payment from your personal checking account to the business credit card, book them to owner contribution equity GL account. Both are balance sheet accounts so they don’t affect your profit loss report.
Another option is to create an account called “loan due to / from blezz3d” and this account can be a liability account. You can dump your personal charges and payments into here. You can use this to keep track how much you owe the business and make sure the payments you make cancel each other to net out to $0 in the end. This is also a balance sheet account so it doesn’t affect your profit loss report either.
Well i dont have business deductions and have business cards. (Uber driver) how can irs audit me? I dont put anything on deductions just regular w2 and 1099 ..
Good video thanks
Some people can’t afford to do certain things so I think the reason they do this is for credit cards so they can get miles or points with those credit cards.
If you are a CPA and you don’t advise your clients about the consequences of expensing personal items as business expenses, your going against the code of ethic of our practice. You can’t tell people “Do it it’s ok! , the chances of getting audited are 1%” either. It’s not very ethical nor professional from you to provide this type of financial advice to your business clients.
I agree with you. However when I had complained to a CPA that I was doing bookkeeping for my ex-coworker and she was writing all sorts of personal expenses in her business and asked this CPA for advice on how to handle it, the CPA told me ultimately this coworker was responsible for her actions because she knew full well what she was doing and doing it with a smile on her face. I don’t personally agree with people doing it and the moment I catch a business owner client pulling this like this, I say BYE BYE contract terminated.
I still don’t understand why you can’t pay with a business card for your purchases. Just ignore these costs when calculating taxes.
When you hire a bookkeeper, you’re delegating. Your bookkeeper is going to assume every single expense on your business card is a business expense. Sure you can do it when you’re doing your own books because you know what you spent your money on and what was personal and what wasn’t. But will your bookkeeper know that? No. People want to form a business so they can walk away and become financially independent, otherwise it’s just another job, except you have 10+ bosses because every client becomes your boss. Once you have a team handling this kind of stuff, this isn’t going to fly. Imagine running a 200 team and you need to tell your bookkeeper every single day, hey I just bought this personal on my business card. What a waste of your precious time that could be spent on running the business better. Plus, the point of forming an LLC or Inc is to protect your personal assets in a lawsuit. Mingling personal and business? You are opening yourself up for trouble when the court wants docs. You can do what you want. Most people aren’t going to follow what I say. Only 1% of people actually looking to grow and scale their business up will see the true value and benefit in my advice here.
The practice is endemic among business owners and the topic is worth discussing frankly as you have here. There is much more to discuss among related topics of ethics like paying with cash and disappearing receipts.
Other than the porn and influencer businesses, tatoos could be a business expense for musicians going after a brand or casting companies inking staff for an event.
Nice video editing with transition and watermarking!
What industry do you think a $500 tattoo would be considered a legit business expense?
Probably youtuber/influencer. .if they film about it
a prostitute
A wrestler
What if I have a business card with a bonus cash offer if a certain spending threshold is reached in the first 3 months? Couldn't I just use it for all my purchases during the first 3 months to meet the threshold to receive a bonus, then later weed out the personal transactions when I'm doing my taxes?
That’s messy bookkeeping
@@AnnieMargaritaYang wouldn't you take a $750 paycheck to do some messy bookkeeping?
So Ive started my own llc while I’m still employed under a big corporation, both being construction trucking and labor. This corp reimburses purches such as fuel for company trucks, parts and supplies. I’ve been thinking about getting a business credit card for work to build business credit before I actually break away and start my own business. Not looking to write anything off or steal money just build credit using my own business credit card rather than a personal credit card that my current employer will reimburse anyways.
So I guess what I’m asking is, is this legal or not.
Its not illegal. Doesn’t matter what kind of credit card you are using to get reimbursed by your employer. What matters is how your bookkeeping is done for your LLC but you’re not doing bookkeeping anyway because youre doing it for reimbursement as an individual employee of a corporation.
It is definitely not illegal.
I think business expense tattoos is image branding for rock and rap acts, or something like Starbucks paying employees to get company logo tattoos.
So my question is, I'm starting a business. I need to travel across the country to produce content. I might just move there for 3 to 6 months. So can I use my business card to rent say a short-term apartment? If I can, write it off, great. If not, that's fine. Not doing it for tax reasons. I just think it would be easier to take that money from my business side vs personal.
Since it’s for your business I would charge the rent as business to keep track of it. But how much of that is deductible you need to ask a tax accountant.
Why are you not my book keeper 😩 you’re so good at explaining
I’m taking clients. Annie@annieyangfinancial.com
Even Trump put his hair care as a business expense! :D
I like the new LIKE button that throws confetti. Reported spammers commenting on your post. BOTS should be removed. Good luck
Maybe for a tattoo artist. It would be like an advert for what they do & a talking point for potential customers! But no other industry
Good one!! - though she was in real estate lol
@@AnnieMargaritaYang lol
Rappers / entertainment / performers too, no??
I started online busines to have some financial freedom and now i actually cant spend money i earned? Cool.
Don't sleep on it... this is a time to invest i recently just bought another property valued at over $10m. I wish I knew the right investment firm to invest with earlier, better late than never thought
I agree with you and I believe that the secret to financial stability is having the right investment ideas to enable you earn more money, I don't know who agrees with me but either way I recommend either real estate or crypto and stocks.
I've always wanted to trade crypto but got confused with the fluctuations in price
*I traded with him, The profit are secured and over a 100% return on investment directly sent to your wallet.*
Wow, i've seen a lot of recommendation about Edward Jones, is he really that good.
❤️
Hi Shanelle!
It is your business to tell business owners this information. You are part of this practice which you say is illegal. You staying silent on this matter and speaking on it here makes it hard for me to listen to you.
Cannot agree more. This is very unprofessional