vania-janet/multiturn-rag-retrieval-data huggingface dataset:
"Disclaimer: This should go without saying, but this answer is definitely an opinion. (I'm pretty sure my current accountant would agree with this answer, and I'm also pretty sure that one of my past accountants would disagree.) When I started my own small business over 10 years ago I asked this very same question for pretty much every purchase I made that would be used by both the business and me personally. I was young(er) and naive then and I just assumed everything was deductible until my accountant could prove otherwise. At some point you need to come up with some rules of thumb to help make sense of it, or else you'll drive yourself and your accountant bonkers. Here is one of the rules I like to use in this scenario: If you never would have made the purchase for personal use, and if you   must purchase it for business use, and if using   it for personal use does not increase the expense to the business, it   can be fully deducted by the business even if you sometimes use it personally too. Here are some example implementations of this rule: Note about partial expenses: I didn't mention partial deductions above because I don't feel it applies when the criteria of my ""rule of thumb"" is met. Note that the IRS states: Personal versus Business Expenses Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part. At first read that makes it sound like some of my examples above would need to be split into partial calulations, however, I think the key distinction is that you would never have made the purchase for personal use, and that the cost to the business does not increase because of allowing personal use. Partial deductions come into play when you have a shared car, or office, or something where the business cost is increased due to shared use. In general, I try to avoid anything that would be a partial expense, though I do allow my business to reimburse me for mileage when I lend it my personal car for business use."
Generally most businesses will not, but it's not uncommon. Not sure about other countries, but in Australia merchants here generally have to pay VISA or Mastercard a commission if the consumer chooses to use credit. So even if they don't levy a charge, they may have a minimum purchase amount which you can use credit cards for. Amongst some of the ones who do include... Pretty much all of the budget airlines like (Virgin) airlines.  I think there's been some outrage with them cause they charge $4.50 per person per trip which in some cases is greater than the transaction cost they have to pay to the credit card companies. Aldi Supermarket link they're kind of a budget supermarket. You got to pay for shopping bags and also charge 1% more for credit card. On a side note, we also have a thing called EFTPOS here (http://en.wikipedia.org/wiki/EFTPOS) which is a debit card network. I think this network charges less commission because generally, a lof of businesses that charge for credit may not charge for EFTPOS. I also feel EFTPOS is also more secure as it requires a pin number, unlike a credit card which requires a signature.
Having a business account for the LLC keeps all of your expenses in one account statement, making your tax deductions easier. If you had a business credit line, the interest is tax deductible (compared to just having a personal credit card for business purposes). Regarding the time/costs of setting up and managing an LLC, this does vary by jurisdiction. It can negligible, or it can be complex. You also only have to do it once. Hire an attorney to give you a head start on that, if you feel that is necessary. Now back to the ""independent contractor"" vs. ""employee"" distinction: It is true that the client will not be paying your social security, but they expect you to charge more hourly than an equivalent actual employee would, solely because you don't get health insurance from them or paid leave or retirement plans or any other perk, and you will receive the entire paycheck without any withheld by the employer. You also get more tax deductions to utilize, although you will now have self employment tax (assuming you are a US citizen), this becomes less and less important the higher over $105,000 you make, as it stops being counted (slightly more complicated than that, but self employment tax is it's own discussion)."
"First IANAL! This is going to depend on the kind of points. If it's an internal point system that the business is doing on their own, then they may very well, give you that many ""extra"" points. They may really not care. Specially if the cost of the points is low enough. Remember that steak dinner that you paid $60 for only really cost them $2 and that they use $60 worth of points on it. If the point system is tied to a bank or credit card, then it's far more likely that the ""just use them"" is not the proper answer. The company doing the reimbursing is giving the location $60 and using your points. The points have a much higher value. With that said, your responsibility is to notify, and follow their rules. So notify them in writing, and use the rewards card as you normally would. If your being honest, then the worst that happens is that your point balance is a little negative (because you spent 100 points but really only had 98 after adjustment). Most likely, if your being honest, they will just eat the few points over that you went on accident. If you get an answer in writing to just keep the points, then I guess you know where your daughter's wedding reception will be. Let's hope it's a classy place. Of course, as a 'good' person (or maybe a 'stupid' person), I should call them, (wait 30 minutes in the queue), and then try to explain the issue to the service desk. I actually did that, and the guy thought I am nuts to even call, and told me to 'just use them they are yours now'. I don't feel like calling again and again until I get someone that believes it, just to return them their points. You will want to do this in writing. Email will work, but you really want a paper trail, either way. I could just toss the card and forget about it. However, I had quite some points on it that really belong to me, so that feels like I pay for their fault. There is no need to do this. It's like a bank error.
But if you write income in a wrong specification or take a wrong deduction that you shouldn't have taken - it will be on your head and you're the one to pay the fines and penalties for that. Missed deductions and credits - CPA's (should) know about all the latest deductions and credits that you or your business might be entitled to. They also (should) know which one got canceled and you shouldn't be continuing taking them if you had before. Expenses - there are plenty of rules of what can be written off as an expense and how. Some things should be written off this year, others over several years, for some depreciation formula should be used, etc etc. Tax programs might help you with that, but again - mistakes are your responsibility. Especially for the first time and for the newly formed business, I think you should use a (good!) CPA. The CPA should take responsibility over your filing. The CPA should provide guarantee that based on the documents you provided, he filled all the necessary forms correctly, and will absorb all the fees and penalties if there's an audit and mistakes were found not because you withheld information from your CPA, but because the CPA made a mistake. That costs money, and that's why the CPA's are more expensive than using a program or preparing yourself. But, the risk is much higher, especially for a new business. And after all - its a business expense.
"You don't specify which country you are in, so my answers are more from a best practice view than a legal view.. I don't intend on using it for personal use, but I mean it's just as possible. This is a dangerous proposition.. You shouldn't co-mingle business expenses with personal expenses.  If there is a chance this will happen, then stop, make it so that it won't happen. The big danger is in being able to have traceability between what you are doing for the business, and what you are doing for yourself.  If you are using this as a ""staging"" account for investments, etc., are those investments for yourself?  Or for the business?  Is tax treatment on capital gains and/or dividends the same for personal and business in your jurisdiction?  If you buy a widget, is the widget an expense against business income?  Or is it an out of pocket expense for personal consumption?  The former reduces your taxable income, the latter does not. I don't see the benefit of a real business account because those have features specific to maybe corporations, LLC, and etc. -- nothing beneficial to a sole proprietor who has no reports/employees. The real benefit is that there is a clear delineation between business income/expenses and personal income/expenses. This account can also accept money and hold it from business transactions/sales, and possibly transfer some to the personal account if there's no need for reinvesting said amount/percentage. What you are looking for is a commonly called a current account, because it is used for current expenses.  If you are moving money out of the account to your personal account, that speaks to paying yourself, which has other implications as well. The safest/cleanest way to do this is to: While this may sound like overkill, it is the only way to guarantee that income/expenses are allocated to the correct entity (i.e. you, or your business). From a Canadian standpoint:"
I would look for these features in the credit card: If there is some kind of reward option like cash back or points, you obviously deduct these from the total costs. Chances are the total costs are higher than the rewards, because generally people don't give you money for free. The reward has to be financed somehow. I would adivse against building up credit card debt. It typically has a high interest rate. So, use the credit card only as a method of payment and pay back the debt so quickly that the interest doesn't start to accumulate.
If you itemize your deductions then the interest that you pay on your primary residence is tax deductible. Also realestate tax is also deductible. Both go on Schedule A. The car payment is not tax deductible.  You will want to be careful about claiming business deduction for home  or car. The IRS has very strict rules and if you have any personal use you can disqualify the deduction. For the car you often need to use the mileage reimbursement rates. If you use the car exclusively for work, then a lease may make more sense as you can expense the lease payment whereas with the car you need to follow the depreciation schedule.  If you are looking to claim business expense of car or home, it would be a very good idea to get professional tax advice to ensure that you do not run afoul of the IRS.
Credit card interest was deductible prior to 1986. Just because it's an expense doesn't mean it needs to be deductible.   We need to move toward elimination of the income tax, we're also $20T in debt, there's gonna be cuts that people aren't gonna like but we have to move forward.
"There are hidden costs to using rewards cards for everything. The credit card company charges fees to the merchant every time you make a purchase.  These fees are a small amount per transaction, plus a portion of the transaction amount.  These fees are higher for rewards cards.  (For example, the fees might be 35 cents for a PIN-transaction on a debit card, or 35 cents plus 2 percent for an ordinary credit card or signature transaction on a debit card, or 35 cents plus 3.5 percent on a rewards card.) After considering all of their expenses, merchant profit margins are often quite small.  To make the same amount of profit by serving a rewards-card customer as a cash customer, the merchant needs to sell higher profit-margin items and/or more items to the rewards-card customer. People who ""pay with plastic"" tend to spend more than people who ""pay with cash"".  If you pay with a rewards card, will you spend even more?"
Is it normal in QuickBooks to have credit card expenses being shows as   liabilities? Is there a way I can correct this? If they are expenses they shouldn't be negative liabilities unless you overpaid your credit card by that amount. It sounds like perhaps when you linked the account the credit/debit mapping may have been mixed up. I've not used QB Online, but it looks like you might have to un-link the account, move all the existing transactions to 'excluded' and then link the account again and flip-flop the debit/credit mapping from what it is now. Hopefully there's an easier way. This QB community thread seems to address the same issue.
If you are willing to use one main credit card for shopping, use a grocery points rewards card like PC Financial Mastercard.   Pay for the groceries using the card to earn points and use those points to reduce costs.  The only limitation is that you must shop at Loblaws, Superstore, No Frills, Zehrs, Fortinos. It works out to $1 = 10 points and 20,000 points = $20.  So that works out to spend $1 to earn back $0.01.
Not authoritative, but according to TurboTax: If your new cell phone acts as both your business and personal phone, you are only allowed to deduct the portion used for business from your taxable income. It’s important for you to hang on to your itemized phone bill and receipts to ensure that you’re deducting the right amounts and to keep records of your deduction. Since the usage you're describing sounds like a very small amount of the overall usage, it will probably be difficult to justify a business expense deduction.
If you are just starting out, I would say there is no disadvantage to using a personal card for business expenses. In fact, the advantage of doing so is that the consumer protections are better on personal cards than on business cards.  One possible advantage to business credit cards, is that many (but not all) will not show up on your personal credit report unless you default. This might help with average age of accounts if you have a thin credit file, but otherwise it won't make much difference. Issuers also expect higher charge volumes on business cards, so as your business grows might question a lot of heavy charges on a personal card. Whether this would ever happen is speculation, but it's worth being aware of it.
How would you respond to these cases: Limited card options - If someone has a bad credit record the cards available may only be those with an annual fee.  Not everyone will have your credit record and thus access to the cards you have. Some annual fees may be waived in some cases - Thus, someone may have a card with a fee that could be waived if enough transactions are done on the card.  Thus, if someone gives enough business to the credit card company, they will waive the fee. On the point of the rewards, if the card is from a specific retailer, there could be a 10% discount for using that card and if the person purchases more than a couple thousand dollars' worth from that store this is a savings of $200 from the retail prices compared to what would happen in other cases that more than offsets the annual fee.  If someone likes to be a handyman and visits Home Depot often there may be programs to give rewards in this case. Credit cards can be useful for doing on-line purchases, flight reservations, rental cars and a few other purchases that to with cash or debit can be difficult if not close to impossible. Some airline cards have a fee, but presumably the perks provide a benefit that outweigh that fee over the year. I'm thinking of the Citibank cards tied to American Airlines, first year free, then an $85 fee.
You don't say what country you live in. If it's the U.S., the IRS has very specific rules for business use of a car. See, for starters at least, http://www.irs.gov/publications/p463/ch04.html. The gist of it is: If you use the car 100% for business purposes, you NEVER use it to drive to the grocery store or to your friend's house, etc, then it is a deductible business expense. If you use a car party for business use and partly for personal use, than you can deduct the portion of the expense of the car that is for business use, but not the portion that is for personal use. So basically, if you use the car 75% for business purposes and 25% for personal use, you can deduct 75% of the cost and expenses. You can calculate the business use by, (a) Keeping careful records of how much you spent on gas, oil, repairs, etc, tracking the percentage of business use versus percentage of personal use, and then multiplying the cost by the percentage business use and that is the amount you can deduct; or (b) Use the standard mileage allowance, so many cents per mile, which changes every year. Note that the fact that you paid for the car from a business account has absolutely nothing to do with it. (If it did, then everyone could create a small business, open a business account, pay all their bills from there, and all their personal expenses would magically become business expenses.) Just by the way: If you are going to try to stretch the rules on your taxes, business use of a car or personal computer or expenses for a home office are the worst place to do it. The IRS knows that cars and computers are things that can easily be used for either personal or business purposes and so they keep a special eye out on these.
"Most people are aware of the existence of merchant processing fees. If this really bothers anyone:  * Get a rewards credit card * Pay the bill off in full every month * Redeem your points for cash back   You've now recovered a good portion of the fees back and have still had the convenience of not carrying cash and all of the other random ""benefits"" (extended warranty, travel protection, etc) cards carry these days.   Some of the programs with 5% cash back will put more back in your pocket than what the fees are since they generally run around 2-4%."
You should be careful about mingling your personal money and that of the business, even if it is a sole prop right now.  It is a good habit to keep separate business and personal bank/credit accounts just so that when you change to an LLC, it is simpler for you to separate what belongs to the company and what is yours personally.  What you're doing makes it more difficult (although only marginally so) to itemize business deductions that were paid with an ostensibly personal credit account.  The better habit to get into now is keeping that distinct separation between personal and business. That being said, there's nothing illegal in what you're doing, but it would make an accountant cringe, that's for sure. (chuckle) Hope this helps. Good luck!
If you are solvent enough, and organised enough to pay your credit card bill in full each month, then use the credit card.  There are no disadvantages and several plus points, already mentioned. Use the debit card when you would be surcharged for using the credit card, or where you can negotiate a discount for not subjecting the vendor to credit card commission.
Also, the IRS is very suspicious of business use of cars and computers, because these are things that are readily used for personal purposes. If you own a copper mine and you buy a mine-boring machine, odds are you aren't going to take that home to dig shafts in your backyard. But a computer can easily be used to play video games or send emails to friends and relatives and lots of things that have nothing to do with a business. So if you're going to claim a computer or a car, be prepared to justify it. You can claim office use of your home if you have one or more rooms or designated parts of a room that are used ""regularly and exclusively"" for business purposes. That is, if you turn the family room into an office, you can claim home office expenses. But if, like me, you sit on the couch to work but at other times you sit on the couch to watch TV, then the space is not used ""exclusively"" for business purposes. Also, the IRS is very suspicious of home office deductions. I've never tried to claim it. It's legal, just make sure you have all your ducks in a row if you claim it. Skip 2 for the moment. 3: Yes, you must pay taxes on your business income. If you have not created an LLC or a corporation, then your business income is added to your wage income to calculate your taxes. That is, if you made, say, $50,000 salary working for somebody else and $10,000 on your side business, then your total income is $60,000 and that's what you pay taxes on. The total amount you pay in income taxes will be the same regardless of whether 90% came from salary and 10% from the side business or the other way around. The rates are the same, it's just one total number. If the withholding on your regular paycheck is not enough to cover the total taxes that you will have to pay, then you are required by law to pay estimated taxes quarterly to make up the difference. If you don't, you will be required to pay penalties, so you don't want to skip on this.
I am not sure but probably it depends upon the cut the credit card company receives from the merchant. For Hotels such as dining etc. the cut could be more. Again, periodically, many merchants join with the card company to launch promotions. It could be part of such promotions. Apart from class of merchants, these points also differ on class of cards e.g a premium card will earn more rewards than a simple classic card.
Fringe benefits such as health insurance for business owners are not deductible as business expenses on the business returns for S corps, partnerships, or sole proprietorships. C corporations can deduct expenses for providing fringe benefits. LLCs don't have a predefined tax treatment - the members or managers of the LLC choose, when the LLC is formed, if they would like to be taxed as a partnership, an S corporation, or as a C corporation. If an LLC is owned by a single person, it can be considered a ""disregarded entity"" and treated for tax purposes as a sole proprietorship. This option is not available if the LLC has multiple owners. The asset protection provided by the use of an entity depends quite a bit on the source of the claim. If a creditor/plaintiff has a claim based on a contract signed on behalf of the entity, then they likely will not be able to ""pierce the veil"" and collect the entity's debts from the individual owners. On the other hand, if a creditor/plaintiff has a claim based on negligence or another tort-like action (such as sexual harassment), then it's very likely that the individual(s) involved will also be sued as individuals, which takes away a lot of the effectiveness of the purported asset protection. The entity-based asset protection is also often unavailable even for contract claims because sophisticated creditors (like banks and landlords) will often insist the the business owners sign a personal guarantee putting their own assets at risk in the event that the business fails to honor its obligations. There's no particular type of entity which will allow you to entirely avoid tax. Most tax planning revolves around characterizing income and expense items in the most favorable ways possible, or around controlling the timing of the appearance of those items on the tax return."