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Credit Cards & Taxes - Hrm?

    • 1 posts
    February 18, 2013 2:52 AM EST

    Hey All,

    I was wondering something - My brother recently purchased quite a bit of equipment for his music production dream job, he did a lot of his purchases on a credit card. I heard this and I thought, well you are creating a business out of this and putting some of your startup costs on a credit card - can he take that off his taxes?

    Since it's not money coming from his actual pocket does that change things? Been looking to find an answer and I'm not seeing anything exact.

    I am probably looking at this wrong - I have a business and a business credit card and take that off taxes, however he is starting up and he used his personal credit.

    Thanks for any advice or knowledge in the matter!

    • 1 posts
    April 2, 2013 12:36 AM EDT

    Probably not. The tax would include whatever has been purchased and the amount spend on it so he would have to taken into account this purchase.

    settlement payments

    • 6 posts
    April 15, 2013 5:10 AM EDT

    If he is purchasing the items to start a business yes he can put it on his taxes.  He is still responsible for paying the credit card.  However, it is very important to separate personal from business expenses.  He needs to keep detail records of his business expenses.  I would recommend separating them as soon as possible.  It just makes it easier to make sure the two funds are not mingling.