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Old 03-19-2011, 03:19 PM
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Join Date: Mar 2011
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Smile Can I use same credit card for both business and personal for IRS purposes?

Besides my company business checking account I also have a AMEX Business
Card. I also put personal purchases on it. I send 2 separate checks to
AMEX each month, the business total from my business account, and
personal total from my personal checking account. Can this cause a
problem for me if I would get audited? Could this be considered as
comingling of funds?



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Old 03-20-2011, 07:50 AM
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Join Date: Oct 2010
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“ Can this cause a problem for me if I would get audited?”--->I guess it deepens ( I mean it depends on how the IRS interprets the situation).As you can see, separate business accounts signal to the IRS that you have a real business and not a hobby. Should( in case, I mean) the IRS come to the decision you have a hobby and not a business, some deductions would be prohibited.Needless to say, it is essential that business credit card be set up separately from personal credit. Small business owners who co-mingle personal credit with business credit run the risk of ruining both business and personal credit ratings should default occur. Business credit that is not co-mingled with personal credit provides several protections to you and your business; for instance, whenyour business be sued, your personal assets are protected: the corporate veil( I am not sure if the concept is available for you) does not exist when personal finances are co-mingled with your business finances; and your lender may limit funding if your personal liabilities are lumped with business liabilities.
“ Could this be considered as comingling of funds?”---->I also guess it depends on the situation. Generally speaking, the distinction between your business credit and your personal credit becomes blurred as long as you give a personal guarantee when you apply for business credit.So,you need to keep charges for business expenses separate from personal charges. Utilize one card for your business and one for personal finances. A sole proprietor runs the risk of decreasing personal credit scores if the business credit card is maxed out with personal charges as well as the business charges.



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