What is the best way to write off business expenses when you pay for them out of your personal credit card or bank accounts?
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First, the expenses must all Be ordinary and necessary for you to carry out your business...and as long as they are, you can avoid trouble with the IRS and make your tax preparation process smooth and easy.
Always buy ONLY business items with your business credit cards! Office expense, software, travel, marketing and advertising, meals and vehicle expenses. If your expense is 100% business simply swipe your business credit card and move on.
If you MUST purchase on your personal accounts, simply create an expense reimbursement report that outlines the expenses, save it in your business files, and write yourself a check for the BUSINESS expense amount and deposit it into your personal account.
Take deductions on your tax return (for LLCs and partnerships) for unreimbursed partner or business expenses and get a deduction on your tax return. This means you only do it once per year but it's better than nothing!
~Chad Pavel, CPA
#taxes #entrepreneurship #finance #money #investing #savings
