Will business cards affect your taxes, IRS reporting, etc?

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agp
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Will business cards affect your taxes, IRS reporting, etc?

Postby agp » Wed May 30, 2012 8:31 am

I'm starting a consulting business, and I want to do everything I can to make this as legitimate of a business as possible - this includes having business credit cards. However, applying for business credit cards raises some questions:

1. How will having a business credit card affect my tax report, IRS/IRA, or anything financial other than my credit report? Will I have to file my taxes different simply because I have a business card? What if I make $0 the first year, do I have to include my business info on my individual tax report?

2. Do you have to be a federally-registered business in order to apply/get approved?

3. Are Amex business points transferrable to personal Amex cards registered under the same SSN? Are Chase UR points transferrable to personal Chase cards registered under the same SSN?

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MikeBones
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Postby MikeBones » Wed May 30, 2012 11:52 am

You file business taxes, the credit card doesn't really affect anything it just allows you to keep everything separate. When you apply they look at your personal credit report and put a hard inquiry on it, you are personally liable for what is put on this card. After getting the card though I have never seen it show up on my personal file, it shows up on a business credit file.

Yes you absolute need to be a registered business but you do it through your state. I live in Arizona so I filed with the Arizona Corporation Commission.

I don't have an AmEx.
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agp
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Postby agp » Wed May 30, 2012 12:05 pm

Is there any merit to this article?

http://www.cardbenefit.com/credit-education/apply-for-business-credit-cards.htm

It says even individuals without businesses can apply for business credit cards, but theyshould use SSN instead of business Tax ID. And I'm guessing according to this article you don't have to register your business either, since you can get a business card if you "sell items through garage sales".

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MikeBones
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Postby MikeBones » Wed May 30, 2012 3:18 pm

I have no experience with this but it does sound to me like it is legitimate.. if you try it out let us know how it goes.
I think you would still file business-like income on your tax forms though, but I'm no accountant.

I would be recommending this to friends of mine if it works out.
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DoingHomework
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Postby DoingHomework » Wed May 30, 2012 9:11 pm

MikeBones wrote:You file business taxes, the credit card doesn't really affect anything it just allows you to keep everything separate. When you apply they look at your personal credit report and put a hard inquiry on it, you are personally liable for what is put on this card. After getting the card though I have never seen it show up on my personal file, it shows up on a business credit file.

Yes you absolute need to be a registered business but you do it through your state. I live in Arizona so I filed with the Arizona Corporation Commission.

You online file with the corporation commission if you are forming a corporation or LLC. Partnerships and sole proprietorships don't file.

There are drawbacks to having a business credit card - one important drawback is that you do not have the same consumer protections. That's one reason why they are being pushed now.

It's also untrue that a personal guarantee is always required. If you establish credit in the name of the business you should not need a personal guarantee. The best way to do that is to establish a good relationship with a local bank. You should be able to get a business credit card within a year. In the meantime just use a personal card in your own name and reimburse yourself.

agp
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Postby agp » Wed May 30, 2012 10:07 pm

So if I apply for a business card as a sole-proprietor with 0 employees, I will not have to file an additional business tax report every year simply because I have a business credit card?

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DoingHomework
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Postby DoingHomework » Thu May 31, 2012 12:43 pm

agp wrote:So if I apply for a business card as a sole-proprietor with 0 employees, I will not have to file an additional business tax report every year simply because I have a business credit card?


Simply having a business credit card does not require you to file a business tax return. But if you have any business income you will need to declare that, usually on a Schedule C form. Also, if you plan to deduct the expenses (interest, fees, etc.) associated with the card you will need to file the Schedule C as well even if you have no income. It really has nothing at all to do with the credit card.

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Postby yousaf002 » Thu Jun 14, 2012 7:00 am

No, business cards do not affect your taxes or IRS reporting for your personal taxes.



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