Is credit card interest deductible for business

Best Business Credit Cards Benefits

noreply@blogger.com (How To Trade Stock By The Hour And Win) — Sun, 04 Oct 2009 02:02:00 +0000

If you are a small business owner, then you are more than likely quite aware of the costs associated with running your business, making payroll and the day to day necessities that may need to be purchased right then, right now. For many small business owners, the idea of being cash strapped has led them to use credit for many, many purchases and sometimes even to pay their employees if things get stretched a bit thin during any given week.

Often times, these small business owners will use their personal credit cards to achieve these goals without giving it a second thought. If you are one of these small business owners, you should seriously consider getting one of the best business credit cards on the market today.

As with personal credit cards, credit cards that are geared towards small businesses can vary from one card to the next... you can find rewards cards, fixed interest rate cards and cards that have a 6 to 12 month introductory APR (annual percentage rate) that is often lower than their competitors. These are reasons enough to choose one of the best business credit cards to supply a line of credit for your business whenever you may need to tap in to it. Additionally, there are other benefits that are just as important. For example, by using your personal card for small business purchases, you could be missing out on a lot of deductions during tax time by not properly separating your business purchases from your personal purchases.

By having a business credit card, you will often receive an end of the year tax summary that tells you where (as in what category your purchases were made) you spent your money and how much you spent, you can then use these numbers to plug right in on your tax return. Of course, you will want to check with a tax adviser to see which amounts are tax deductible.

The above are many of the more popular reasons small business owners choose the best business credit cards to use in their jobs. Anyone who owns their own business should have at least two small business credit cards at their disposal so they can cover anything unexpected that may come their way.

Article By Louis, CardKudos[dot]com

Find reviews and tips about the best business credit cards as well as related credit card articles such as credit card comparison at Cardkudos.com.

Rule Of Four: What You Need To Know About Small Business Financing Credit Cards

noreply@blogger.com (How To Trade Stock By The Hour And Win) — Sun, 04 Oct 2009 01:59:00 +0000

Money is not everything. There are travelers' checks, money orders, and credit cards. When you start your own business, there's a way for you to obtain much-needed capital, too. This way is called small business financing credit card.

Small business financing credit card, also known as small business starter credit cards, is a great way to keep your personal and business finances separate.

Personal Credit Card Versus Small Business Financing Credit Card
In the past and even at present, lots of entrepreneurs rely on their personal credit to get their business up and running. The problem with this is that they carry the debt from their business into their personal credit cards. Ultimately, they end up hurting their personal credit scores.

This is where small business financing credit cards come in. They offer higher credit limit. Additionally, they keep business and personal expense separate, thereby making it painless to track tax deductions. More importantly, you may write off your small business financing credit card's finance charges and annual fees.

Why Get a Small Business Financing Credit Card

1. Build Credit
A small business financing credit card is a good way to build a financial history. Your business is a start-up; it's unknown. This makes it difficult for your business to obtain loans. A small business financing credit card will remedy this. It will provide banks with the spending footprints they need to reassure themselves you're a responsible borrower.

2. Avoid Intermingling
When it comes to managing your expense, there's one thing you should always do. Segregate, segregate, segregate. Do not mix business and personal transactions. This might later on create tax and money management problems.

3. Prevent Shoebox Accounting
It is always a nightmare to track business expenditures. With a small business financing credit card, however, you can turn the nightmare into one you can easily snap out of. Your credit card company will provide you with a year-end statement where you can find your transactions summarized, itemized, and categorized. With such a report available, there's no need to keep a shoebox stacked with receipts.

4. Special Rewards
The credit card industry is so competitive providers fall over themselves to lure borrowers. Accordingly, a reward and discount program for small business credit card users was developed. Every time you use your small business financing credit card, you qualify for discounts and rewards, ranging from office supplies and plane tickets to phone services.

How to Manage Your Small Business Financing Credit Card Effectively
Credit cards, whether personal or corporate, will always be open to potential abuse. Effectively manage your small business financing credit card by:

1. Limiting card hopping
Sure, you qualify for multiple cards, but this does not mean you should sign up. You shouldn't. This will only tempt you to overspend. It will hurt your credit rating, too.

2. Steering clear of cash advances
Never use this credit card feature unless you need to bail yourself out of jail. It comes with whooping credit card fees and interest costs.

3. Avoiding late payments
The more delinquent your payments are, the higher the fees and interest rates you would be saddled with. Moreover, late payments hurt your credit reputation.

4. Using grace
Many companies offer a 21-day grace period to clients before asking them to pay for purchases. Turn this to your advantage by drawing up a schedule of your purchases and payments.

Use your small business financing credit card prudently. Remember, credit cards should be a financial safety net, not a trap.

Planning to get small business financing credit cards? Visit CreditCardMonitor.org now and learn more about low interest fixed rate credit cards and credit card application online approval.

When is Your Credit Card Interest a Tax Deduction?

noreply@blogger.com (How To Trade Stock By The Hour And Win) — Sun, 04 Oct 2009 01:56:00 +0000

Getting your taxes done can be a huge hassle. But while you are doing your taxes, you try to think of every kind of thing you could get a deduction on. Of course, there are several things that are tax deductible.

But you have always wondered if your credit card interest is. Can you really get something back from you taxes by paying all that interest on your taxes?

Sorry, but no. Unfortunately, unlike the interest you pay on your mortgage, your credit card interest is not tax deductible.

But there is a way you can make it tax deductible. Still, there are some risks involved.

Whether or not the risk is worth it is completely up to you. For you are the one who knows your circumstances. If you really want your credit card interest to be tax deductible, here is what you do.

Refinance Your Home

Sound absurd? If you are doing it just to get a tax deduction on your credit card interest, it probably is.

Getting a tax deduction on such a thing would be a small reward with high risk. If it is that important to you though, refinancing your home can make your credit card interest tax deductible, in a way. It is possible for you to refinance your home and transfer the balance on your credit card to your home loan.

That way, you have basically paid off your credit card and do not have to pay interest on it anymore. Now, instead, you have more interest to pay on your home loan, or your mortgage. That kind of interest is in fact tax deductible.

By transferring your credit card balance to your home equity line of credit, you turn the money you owe on your credit card into money that you owe on your home. You will then pay interest only on your mortgage, and that, in fact, is tax deductible.

Warning:

You could lose your home. That sounds a little dramatic, but the chances that you could lose your home increase if you transfer your credit card balance to your home equity line of credit.

Not necessarily just because you refinanced it to get your credit card balance transferred, but because it may take longer for you to pay off your home loan. Because it would take you longer and make your balance bigger, it may be difficult to make monthly payments in full and on time.

In my opinion, refinancing your home to get a tax deduction is definitely not the wisest thing to do. Better chances of keeping your home is way more important than getting money back from the interest you paid on your credit card. To me, the risk is just too big to take.

Having a home loan is enough of a hassle and takes long enough to pay off as it is. If you extend that by refinancing, it increases the risk that you will get your house repossessed. The whole question is, "Is a tax deduction worth that kind of risk?"

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