Hello,
I recently launched a Recording Studio in Connecticut. While going through the process of getting together equipment I needed, I had to use my personal credit card to cover some immediate business expenses. My plan now is to sign up for a business credit card so that I can keep the business expenses separate going forward, but I need to figure out how to pay the debt on the personal credit card now that I am up and running in a way that doesn't screw up my taxes. I also work a full time job, which is the majority of my income (at least for the next few years).
I am an LLC. I've kept track right to the penny of every single purchase I made for the business on my personal credit card. Business is a single member LLC using my SSN. I'm also the sole credit card holder. I would like to do one of the following things, but I'm not sure which is best.
Option 1) Since I plan on getting a business credit card, I was hoping to do a balance transfer of the exact amount I spent on business expenses. I could then take advantage of 0% promos and so on, as well as making my payments cut and dry (business bank account to business credit card). My concern here is whether or not this effects my tax situation at all. I have every receipt and statement showing balances. My concern here is paper trail I think...
Option 2) Write payment checks from my business account to my existing credit card not exceeding the balance I used for business purposes. Can I do that or will it look strange making a payment to a personal credit card from a business account.
Option 3) Write myself checks from the business account (so that I'm taking a pay check) and deposit into my personal account. Then use my personal account to make a payment to the personal credit card. This is a lot more steps then I want to take, but if I have to do it this way, I will.
Essentially, I would like to know which of these methods is OK for me to use. If I've documented all the expenses, does it really matter which one I use? Any advice I can get would be greatly appreciated. Thanks!
-Matt
I recently launched a Recording Studio in Connecticut. While going through the process of getting together equipment I needed, I had to use my personal credit card to cover some immediate business expenses. My plan now is to sign up for a business credit card so that I can keep the business expenses separate going forward, but I need to figure out how to pay the debt on the personal credit card now that I am up and running in a way that doesn't screw up my taxes. I also work a full time job, which is the majority of my income (at least for the next few years).
I am an LLC. I've kept track right to the penny of every single purchase I made for the business on my personal credit card. Business is a single member LLC using my SSN. I'm also the sole credit card holder. I would like to do one of the following things, but I'm not sure which is best.
Option 1) Since I plan on getting a business credit card, I was hoping to do a balance transfer of the exact amount I spent on business expenses. I could then take advantage of 0% promos and so on, as well as making my payments cut and dry (business bank account to business credit card). My concern here is whether or not this effects my tax situation at all. I have every receipt and statement showing balances. My concern here is paper trail I think...
Option 2) Write payment checks from my business account to my existing credit card not exceeding the balance I used for business purposes. Can I do that or will it look strange making a payment to a personal credit card from a business account.
Option 3) Write myself checks from the business account (so that I'm taking a pay check) and deposit into my personal account. Then use my personal account to make a payment to the personal credit card. This is a lot more steps then I want to take, but if I have to do it this way, I will.
Essentially, I would like to know which of these methods is OK for me to use. If I've documented all the expenses, does it really matter which one I use? Any advice I can get would be greatly appreciated. Thanks!
-Matt
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